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Court Threatens To Sanction SEC Over Legal Battle With Crypto Firm, Here’s Why

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A US district Court has cautioned the US SEC on a series of misinterpretations in its allegations against crypto firm Debt Box. The Court has threatened official sanctions if the regulatory body fails to substantiate its claims.

Court Questions SEC Attorney’s Inaccuracies In Crypto Case

United States District Judge Robert Shelby has called out attorneys of the US Securities and Exchange Commission (SEC) for several inconsistencies in its statements and claims against Debt Box, a blockchain technology network.

Earlier in August 2023 the SEC had obtained a warrant for a temporary asset freeze and restraining order against Debt Box. According to the SEC, Debt Box had allegedly violated securities laws by selling unregistered securities termed “node licenses” and defrauding investors of at least $49 million.

In the court filing, Michael Welsh, US SEC attorney, had made various allegations against Debt Box. The Commission had informed Judge Shelby that Debt Box was allegedly attempting to relocate its assets and investor funds overseas, potentially evading US regulators.

“Even in the last 48 hours Defendants have closed additional bank accounts, and I believe the number, I don’t have it in front of me, was around 33 bank accounts have been closed.”

He added that “mere days before the TRO Hearing, consistent with counsel’s representation to the Court, the Commission learned that a substantial portion of the funds held in two bank accounts controlled by Defendants, including one controlled by DEBT Box, had been substantially drained of assets.”

In response to the SEC’s claims, Debt Box Attorneys, and DEBT Council Defendants presented evidence that sufficiently counteracted the SEC’s allegations. The defendants provided documents showing that the majority of the 33 accounts mentioned by the SEC were closed by the bank and not the defendant.

Furthermore, Debt Box attorneys disclosed that the company had started

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Author: Scott Matherson

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