Regulation
SEC to Repay $1.8 Million After Crypto Lawsuit Collapses
A U.S. district court judge has ordered the Securities and Exchange Commission (SEC) to reimburse DEBT Box, a cryptocurrency company, nearly $1.8 million in legal fees.
This order follows the dismissal of the SEC’s lawsuit against DEBT Box, which had alleged fraudulent activities involving $50 million in sales.
The case was dismissed without prejudice, leaving the door open for possible future actions, but not without the court pointing out the SEC’s missteps and misrepresentations during the process.
The SEC’s initial lawsuit against DEBT Box included an asset freeze based on an ex parte restraining order, which was later determined to have been obtained through distorted facts.
Judge Robert Shelby’s decision not only requires the SEC to cover DEBT Box’s legal costs, but also serves as a critique of the agency’s conduct.
The SEC will pay approximately $1 million in attorney fees and $750,000 in escrow fees, reflecting the financial burden of the case on the crypto company.
Despite a apologies According to SEC enforcement chief Gurbir Grewal, the judge insisted on imposing sanctions, rejecting the notion that the SEC’s actions were mere oversights.
The SEC’s failed lawsuit against DEBT Box began with serious accusations of defrauding investors through the sale of unregistered securities.
However, the SEC’s procedural behavior, characterized by the use of misleading statements to obtain a cease-and-desist order, ultimately led to the dismissal of the charges and the imposition of a financial penalty on the regulator.