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Crypto News – Debt Box Case Dismissed: SEC Ordered to Pay $1.8M in Legal Fees

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Crypto News - Debt Box Case Dismissed: SEC Ordered to Pay $1.8M in Legal Fees

Debt Box Case Dismissed, SEC Hit with $1.8M Fee Order

Crypto News- A federal judge has ordered the United States Securities and Exchange Commission (SEC) to pay approximately $1.8 million in attorney and receivership fees related to its civil case against Digital Licensing, also known as Debt Box.

Judge Orders SEC to Cover Legal Costs

On May 28, Judge Robert Shelby of the U.S. District Court for the District of Utah issued an order mandating that the SEC cover about $1 million in attorney fees and costs, plus an additional $750,000 in receiver fees and costs. This decision coincided with the judge’s dismissal of the case without prejudice. Judge Shelby referenced a March ruling that determined the SEC had acted in bad faith when it sought a temporary restraining order to freeze Debt Box’s assets. Debt Box subsequently presented evidence to the court indicating that the SEC’s information was inaccurate, which prompted the threat of sanctions.

Crypto News - Debt Box Case Dismissed: SEC Ordered to Pay $1.8M in Legal Fees

SEC Sanctioned for Bad Faith Conduct

The sanctions required the SEC to reimburse “all attorney fees and costs arising from the improvidently entered ex parte relief.” Judge Shelby deemed nearly all of the defendants’ requested costs as “appropriate,” except for a single $649 fee.

Debt Box Celebrates Legal Victory

“This is a significant win for us,” Debt Box announced in a May 28 post on X (formerly Twitter). “It means that the SEC cannot proceed with the case as it stands.”

Background of the Case

The SEC had filed a lawsuit against Debt Box in July 2023, accusing the company of running an illegal $50 million crypto scheme. However, Debt Box’s subsequent documentation suggested that the SEC had made false statements and misrepresentations in its attempt to secure the temporary restraining order, which has been seen by many in the crypto community as an example of regulatory overreach.

Broader Implications for Crypto Regulation

The SEC continues to pursue lawsuits against several other crypto firms, including Binance, Kraken, Ripple, and Coinbase. Meanwhile, numerous lawmakers in the U.S. Congress are advocating for clearer regulatory guidelines for digital assets through proposed legislation such as the Financial Innovation and Technology for the 21st Century Act.

FAQ: Dismissal of the Debt Box Case and SEC’s $1.8 Million Fee Order

What was the Debt Box case about?

The SEC had filed a lawsuit against Digital Licensing, doing business as Debt Box, in July 2023. The commission accused the company of running an illegal $50 million crypto scheme.

Why did the judge dismiss the Debt Box case?

Judge Robert Shelby dismissed the case without prejudice, citing a March ruling that found the SEC engaged in bad faith conduct when it sought a temporary restraining order to freeze Debt Box’s assets. Debt Box provided evidence that the SEC’s information was inaccurate, leading to the case’s dismissal.

What does “without prejudice” mean in this context?

“Without prejudice” means that the SEC is allowed to refile the case in the future if it can address the issues that led to the dismissal.

For the latest in crypto updates, keep tabs on Crypto Data Space.

Crypto News - Debt Box Case Dismissed: SEC Ordered to Pay $1.8M in Legal Fees

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