The SEC has faced court sanctions against another crypto, the dismissal files

DEBT Box, a company that primarily provides users with crypto mining software, was brought to court by the SEC last year.

According to the regulator, DEBT Box defrauded investors of $50 million by selling unregistered securities. The company, which provides an ecosystem to go with the software, has its own token, DEBT, to facilitate payments across the ecosystem. However, it is primarily a tool used to transfer property in the home.

Properties have been dropped by mistake

In August, the SEC asked a court to freeze DEBT Box's assets, saying the company was putting users' money at risk after transferring $720k to foreign bank accounts.

Further, the request is made ex parte, i.e. it does not come under the cognizance of DEBT Box and therefore cannot be challenged in court. The agency said the company's lawyers were trying to fend off an SEC inquiry, which is the kind of thing lawyers are hired to do.

Although the closure of the property was allowed, new evidence later came to life, which proves that the transfer of the property in question was done in the country. The foreclosure on the property was lifted, and DEBT Box's attorneys wasted no time in requesting that the case be dismissed.

However, the SEC has since filed its own dismissal request, asking for a lighter penalty than the one requested by the accused.

“I'm sorry, I'm so sorry. How long are you going to punish me? Why can't we just move on? Let the past be the past, but it will never be. The difference is that this time I was the one who did the wrong thing? Does it have to change?”

Dolly Parton, “Bygones. And the SEC in Surr's response to the Debt Box. pic.twitter.com/eS6ZStxp2A

— paulgrewal.eth (@iampaulgrewal) January 30, 2024

Prejudice should not be applied

SEC attorneys were hit with a request to show cause, meaning they would have to justify themselves in court or face penalties.

According to Fortune , the SEC argued that the false evidence was not submitted maliciously and was based on a video produced and posted by one of the defendants in the YouTube lawsuit.

“While the Commission recognizes that the lawyers should have come to court more often, sanctions are not appropriate or necessary to address these issues. The Commission continues to take steps to address the issues identified by the Court and to identify other issues that may warrant further attention.”

Because of the error, which the SEC claims was inadvertent, the regulator asked that the defendant's request for a stiff penalty be dismissed – even though they agreed to have the charges dismissed.