SEC Receives Warning from Judge for Alleged Deceptive Tactics in DEBT Box Cryptocurrency Case

U.S. District Judge Robert Shelby has issued strict orders to Securities and Exchange Commission (SEC) lawyers, hinting at possible sanctions for legal action against cryptocurrency company Digital Licensing Inc., also known as DEBT Box, accused of defrauding investors. A warning has been issued. $50 million through the sale of unregistered securities known as “node licenses.”

Discrepancies in the SEC case surfaced when Judge Shelby found inaccuracies in the initial claims that led to the freezing of DEBT Box assets.

The claim that the company was relocating to Dubai was proven to be false as there was no bank account closure and suspicion of overseas remittance of $720,000 occurred domestically.

Expressing concerns about the conduct of SEC attorneys, Judge Shelby suggested a violation of Federal Court Rule 11(b), which mandates factual assertions based on evidence. In response, he issued a “show cause order” requiring the SEC to justify why they should not be punished for these actions.

The complexity of the case deepens with the TRM Labs report supporting the SEC’s main claim that DEBT Box defrauded investors regarding mining tokens. The defense has not yet issued a statement, and the SEC plans to acknowledge the order and respond within the specified two weeks.

These legal developments highlight the complexity of cryptocurrency regulation and highlight the importance of liability in high-stakes financial litigation.

Unperturbed by SEC’s allegations of dishonesty, Ripple lawyer John E. Deaton suggests personal bias in cryptocurrency case and demands subpoenas from financial regulators. His colleague Stuart Alderoty, Ripple’s chief technology officer, highlights troubling patterns observed in the SEC’s behavior on cryptocurrency-related matters, raising questions about the agency’s credibility in such cases.