Tech
Judge Orders SEC to Pay Cryptocurrency Firm Debt Box’s Legal Fees
A US federal judge has ordered the Securities and Exchange Commission (SEC) to pay approximately $1.8 million in legal fees to cryptocurrency firm Digital Licensing Inc., also known as Debt Box, after dismissing the case without prejudice of the SEC against the company. This means that the case could potentially be reopened in the future.
Judge Robert Shelby of the Utah District Court he decided in a statement on Tuesday that the SEC must cover the attorneys’ fees and related legal costs incurred by Debt Box. The judge also stated that the final amount of fees requested by the defendants and the trustee is reasonable.
In a separate presentation on the same day, Judge Shelby dismissed the case without prejudice at the SEC’s request. The Commission argued that this type of dismissal would protect investors and serve the public interest, without causing legal prejudice to the defendants. Debt box celebrated the court’s decision in an X post following the order:
The court imposed sanctions on the SEC, requiring them to cover the legal fees and costs incurred by DEBT Box during this legal battle. This is a significant step towards justice and transparency. […] This means the case is closed and any future action by the SEC will have to go through Judge Shelby.
A long fought battle
The case began in July 2023 when the SEC filed a complaint accusing Debt Box of defrauding investors of at least $49 million. However, in a March document, the federal judge criticized the SEC’s conduct in obtaining the temporary restraining order, which included the freezing of assets and the appointment of a receiver to take control of the company.
In April, two SEC lawyers led the case against Debt Box he reportedly resigned after the Utah judge said the case was “tainted by false statements and misrepresentations.” The SEC admitted it in December that he made inaccurate statements and failed to live up to expectations of being accurate and truthful in court.
The SEC’s strongly anti-crypto stance is nothing new. Only the regulator approved the first spot Bitcoin ETFs listed in the United States in January, after many years of legal battles with the industry and back-and-forth ETF registrations and rejections. Earlier this month, the SEC expressed strong disapproval of a recently passed bill widely seen as pro-cryptocurrency.