A federal judge has granted the Securities and Exchange Commission (SEC) an additional week to clarify its actions in a case against the cryptocurrency startup DEBT Box. This extension, pushing the response deadline to December 21, follows a directive from Chief United States District Judge Robert J. Shelby of Utah. Judge Shelby had previously questioned the SEC’s statements regarding DEBT Box’s alleged attempts to transfer assets overseas, suggesting that some of the regulator’s claims might be “materially false and misleading.”
The agency accused the firm of perpetrating a $50 million fraudulent crypto scheme. Debt Box sold software mining licenses tied to real-world assets, which the SEC claimed were unregistered securities. The defendants refute this claim.
Concerns over SEC’s conduct
The SEC’s pursuit of DEBT Box, a crypto startup, involved efforts to implement and maintain a temporary restraining order. However, Judge Shelby raised concerns about the evidence and statements provided by the SEC, which claimed that DEBT Box was attempting to move assets beyond the regulator’s jurisdiction. These allegations have led to the judge asking the SEC to justify why its lawyers should not face sanctions. The SEC’s response to these queries is now under intense scrutiny.
SEC’s internal review and statement
In light of the judge’s order, the SEC has undergone an internal review, assigning a new team of attorneys, including members from its Office of the General Counsel (OGC), to examine the case’s developments. This team is tasked with preparing a comprehensive response to the court’s inquiries. In a statement issued on December 7, the SEC expressed its commitment to addressing the court’s concerns diligently and thoroughly. The regulator’s request for an extension, they explain, is to ensure a complete and accurate presentation to the court.
This situation underscores the complexities and challenges faced by regulatory bodies like the SEC in overseeing the rapidly evolving cryptocurrency market. The outcome of this case could have significant implications for the SEC’s future approach and strategies in regulating digital assets and startups within the crypto industry.
Cryptopolitan reported earlier that Debt Box and several co-defendants are seeking the dismissal of the lawsuit brought forth by the United States Securities and Exchange Commission. Nonetheless, the SEC’s upcoming response will be closely watched by both the crypto industry and legal experts.