SEC Acknowledges Inaccuracy

SEC admits it made inaccurate statements in Utah crypto case SEC Admits Inaccuracies, Asserts Asset Freeze in DEBT Box Case The Securities and Exchange Commission (SEC) has conceded to making inaccurate statements in the lawsuit against crypto startup DEBT Box. Despite acknowledging its misstatements, the SEC insisted that the freezing of the firm's assets should persist. The controversy emerged in November when Utah's top federal judge, Robert J. Shelby, criticized SEC lawyers for their handling of the case, particularly the request for a restraining order on DEBT Box to freeze its assets. The judge demanded a basis for their claims, especially regarding allegations that the company was attempting to move assets overseas to evade regulatory jurisdiction. In response to the court's demand, the SEC admitted to misstating some accusations to support the request for the restraining order. Notably, the regulator acknowledged inaccuracies in claims that DEBT Box was closing numerous accounts during the ongoing litigation. The SEC conceded that it "fell short" of expectations in terms of accuracy and candor in court, making representations that were inaccurate and failing to correct them promptly. However, the agency insisted that it had acted in good faith and justified its request for the restraining order. To address the inaccuracies, the SEC announced corrective measures, including assigning senior attorneys from the Commission’s Denver Regional Office to supervise the case. Additionally, the SEC's Division of Enforcement will conduct mandatory training for its staff on the duty of accuracy and candor, emphasizing the duty to correct any inaccuracies promptly. The lawsuit against DEBT Box alleges fraud amounting to $49 million, accusing the company of deceiving thousands of investors. DEBT Box purportedly offered "node licenses" to customers, claiming they could receive mining revenue without operating an actual mining operation. The SEC contends that DEBT Box falsely represented having a real-world business and accused the firm of attempting to move assets overseas to obstruct the SEC investigation and evade regulatory oversight. Although the SEC obtained a restraining order earlier this year, it was dissolved in October after the court determined that the regulator failed to adequately substantiate its claims.