A US district court has issued sanctions against the SEC for “willful” misconduct in the Debt Box lawsuit. Judge Robert J. Shelby rejected the SEC’s motion to dismiss and criticized them for deliberately lying to the court about the evidence.
Shelby believes this behavior undermines the integrity of the litigation and justice process. He also emphasizes that the evidence presented by the SEC is lacking foundation and has been intentionally exaggerated and misleading. He proposes imposing attorney fees and costs incurred from this behavior.
In the August lawsuit, the SEC alleged that Debt Box carried out a $50 million cryptocurrency fraud scheme in the context of its operations as a software license provider. When the TRO and asset freeze were requested, the regulatory agency claimed that Debt Box had transferred $720,000 overseas and would flee to the United Arab Emirates and secretly transfer more assets along with that money if notified of this order.
The initial request was granted. However, Shelby later reviewed his own initial order and concluded that the SEC had misrepresented the evidence and instead, the $720,000 transfer had been sent within the United States.
In December, Judge Shelby issued the SEC a “show cause order” – a court order requiring a party to justify, explain, or prove something before the court. Although the SEC acknowledges that its actions are not “imminent,” the regulatory agency argues that the sanction order is inappropriate.
