A federal judge has issued a ruling that requires the United States Securities and Exchange Commission (SEC) to pay approximately $1.8 million in attorney and receivership fees in relation to the regulator’s civil case against Digital Licensing, also known as Debt Box. The ruling, signed by Judge Robert Shelby on May 28 in the U.S. District Court for the District of Utah, mandates that the SEC pay around $1 million for attorney fees and costs, as well as $750,000 for receiver fees and costs. This order was issued on the same day that the case was dismissed without prejudice.
Judge Shelby referenced a previous ruling from March, in which the court determined that the SEC had engaged in bad faith conduct regarding a temporary restraining order to freeze Debt Box’s assets. Debt Box subsequently filed documents with the court claiming that the commission’s information was inaccurate, which led to the possibility of sanctions. As a result, the SEC was required to cover all attorney fees and costs arising from the relief that was improvidently entered ex parte. Judge Shelby determined that all costs requested by the defendants, except for a $649 fee, were appropriate.
Debt Box expressed satisfaction with the ruling, stating in a May 28 post, “This is a significant win for us. It means that the SEC cannot proceed with the case as it stands.” The SEC’s lawsuit against Debt Box, filed in July 2023, alleged that the firm had carried out an illegal $50 million cryptocurrency scheme. The company presented documents to the court that suggested the commission had made false statements and misrepresentations in its attempt to obtain a temporary restraining order against the firm. This case has been cited by many in the crypto industry as an example of regulatory overreach.
In addition to the case against Debt Box, the SEC has ongoing lawsuits against several other cryptocurrency firms, including Binance, Kraken, Ripple, and Coinbase. Many lawmakers in the U.S. Congress have been advocating for regulatory clarity at the SEC regarding digital assets through legislation like the Financial Innovation and Technology for the 21st Century Act.
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