Debt Box refutes SEC’s dismissal attempt, claims tactical maneuver.

Software company Debt Box is urging a federal judge in Utah to reject the United States Securities and Exchange Commission’s (SEC) motion to dismiss a controversial enforcement action against them. In their filing on February 14th, Debt Box characterized the SEC’s move as a strategic maneuver to avoid potential sanctions and a permanent dismissal based on alleged misconduct. The SEC had submitted a motion to dismiss its case against Debt Box on January 30th, stating its intention to evaluate the evidence and understand the factors that might have led its legal representatives to make inaccurate statements to the court initially. However, Debt Box argues that the SEC’s willingness to dismiss the case without prejudice is a strategic move to evade sanctions and potentially initiate a revised version of the enforcement action without misconduct allegations. Debt Box claims that the SEC’s attempt to dismiss the case is an effort to receive preferential treatment in federal courts over the entities it regulates. They highlight the SEC’s dissatisfaction with promises to restructure teams or provide more ethics training when businesses are accused of misleading investors. The filing follows the SEC’s acknowledgment in late December 2023 that they had made inaccurate statements to the court earlier in the case. Judge Robert Shelby had previously criticized the SEC’s lawyers and instructed the agency to clarify the “false or misleading” statements regarding the company’s alleged attempt to relocate assets overseas to evade regulatory jurisdiction. However, Shelby found that the SEC had misrepresented the situation. In response to a court order, the regulator changed its legal representation, committed to internal training, and sought a temporary dismissal for an internal review. Debt Box has also requested that the scheduled hearing on March 7th proceed as planned, despite the SEC’s request for cancellation. In the early stages of the case against Debt Box and its promoters, the SEC obtained emergency measures, alleging that the software company defrauded investors of at least $50 million by selling unregistered securities in the form of software licenses claiming to mine digital assets connected to real-world industries. On August 3rd, 2023, the SEC won a temporary restraining order to freeze Debt Box’s assets, claiming that the company would remove evidence and secretly transfer assets overseas if they were notified of the order.