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Judge Orders SEC to Pay $1.8 Million in Legal Fees for Misconduct in Debt Box Case

Nerayoff, Court, Lawsuit

A federal judge has directed the United States Securities and Exchange Commission (SEC) to pay about $1.8 million in legal and receivership expenses linked to the civil lawsuit against Digital Licencing, the company operating as Debt Box.

Judge Robert Shelby approved an order mandating the SEC pay about $1 million for attorney fees and costs and $750,000 for receiver fees and costs in a May 28 filing in the U.S. District Court for the District of Utah. The court proceeded with a non-biased rejection of the matter the same day.

SEC’s Misconduct and Legal Penalties

The judge highlighted a March finding in which the SEC “engaged in bad faith conduct” over a temporary restraining order to freeze Debt Box’s assets. Later on, the company submitted paperwork to the court alleging erroneous commission data, which resulted in a threat of fines.

The penalties against the SEC mandated that the commission pay “all attorney fees and costs arising from the improperly entered ex parte relief.” Except for one $649 fee, Judge Shelby basically decided that all expenses the defendants asked for in the case were “reasonable.”

“This is a big victory for us,” claimed Debt Box in a May 28 X article. “It implies that the SEC cannot move forward with the case as it exists.”

The July 2023 SEC complaint against Debt Box claimed the company ran an illicit $50 million coin scam. Many in the crypto industry have referred to the company as an example of regulatory overreach because it showed records suggesting the commission had made false statements and misrepresentations in trying to obtain a temporary restraining order against the company.

READ:  SEC Closes Salt Lake City Office After DEBT Box Case

This Might Interest You: U.S. Prosecutors Recommend Former FTX Executive Ryan Salame Receive Five to Seven Years in Prison

The commission is now suing many cryptocurrency companies, including Binance, Kraken, Ripple, and Coinbase. Through laws like the Financial Innovation and Technology for the 21st Century Act, several American Congressmen have been advocating regulatory clarification at the SEC over digital assets.

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