DEBT Box and other defendants in a lawsuit filed by the Securities and Exchange Commission want the case dismissed after the court found the agency lied to obtain a temporary restraining order against them.
“The SEC was wrong in this matter. This is really false,” lawyers for Digital Licensing Inc., which does business as DEBT Box, said Judge Robert Shelby of Utah federal court filed a motion to dismiss on Dec. 4. “The SEC should not be allowed to continue telling false stories to avoid being fired.”
The SEC obtained a temporary restraining order to freeze DEBT Box’s assets on August 3, saying the company would delete evidence and secretly move the assets offshore if it was informed the order would be imposed on it.
The agency accused the company of perpetrating a $50 million crypto fraud scheme. DEBT Box sold software mining licenses tied to real-world assets that the SEC determined were unregistered securities. The defendants refute this assertion.
“Not only are such allegations false, they also fail to meet basic standards of pleading,” he wrote in his latest motion.
A federal court in Utah reversed asset freeze on November 30, claiming that the SEC misrepresented evidence by claiming that DEBT Box had closed bank accounts and intended to move to the United Arab Emirates and escape the SEC’s jurisdiction.
The court found that the company failed to close the bank accounts and that a $720,000 transfer that the SEC said was sent overseas was actually sent domestically.
The SEC is “distorting the state of the law regarding crypto assets” in its “fatally flawed advocacy,” DEBT Box said.
The SEC’s misrepresentation resulted in Judge Shelby issuing an “order to show cause,” requiring the regulator to provide reasons why it should not face sanctions for its actions.
‘Shocking’ SEC Behavior Deserves Punishment, Say Ripple Executives
Ripple Chief Technology Officer David Schwartz said the SEC’s behavior was “shocking.”
“The SEC went to a judge seeking an emergency order to cripple several companies and blatantly misrepresented the facts to get it before anyone on the other side could defend themselves,” he said. he declares. said in an article X (Twitter) of December 5.
Related: ‘We had to change strategy,’ SEC enforcement director says of recent actions: report
Pro-Ripple lawyer John Deaton hopes the regulator will be forced to pay for the damage caused to DEBT Box.
The Debt Box case is a prime example of why Judge Netburn felt OBLIGED to announce to the world that SEC lawyers “lack faithful allegiance to the law” and do or say anything or to advance its own agenda.
In Debt Box, the SEC successfully obtained a temporary restraint… https://t.co/Qr2jrOyb1J
– John E Deaton (@JohnEDeaton1) December 5, 2023
The four DEBT Box executives – Jason Anderson, his brother Jacob Anderson, Schad Brannon and Roydon Nelson – and 13 others were included in the SEC’s action.
Review: Crypto Regulation: Does SEC Chairman Gary Gensler Have the Final Say?