SEC to pay $1.8 million in fees after dismissal of case against debt fund

The United States District Court for the District of Utah has dismissed the Securities and Exchange Commission’s (SEC) case against Digital Licensing, which operates under the name Debt Box.

The judge has also ordered the SEC to pay approximately $1.8 million in attorney fees and judgment.

The SEC ordered it to pay $1.8 million in fees

In a post on X dated May 28, Debt Box confirmed the dismissal, stating, “The US District Court for the District of Utah has officially dismissed the SEC’s case against us without prejudice. This means that the case is closed and any future action by the SEC would have to go through Judge Shelby.

As described in a May 28 filing, Judge Shelby has ordered the SEC to pay approximately $1.8 million in attorney fees and costs and $750,000 in receivership fees and costs. This ruling coincided with the filing of the case without prejudice.

The decision stems from a March ruling in which the court found the SEC guilty of “bad faith conduct” regarding a temporary restraining order and freezing of Debt Box’s assets. This came after the SEC launched legal proceedings against Debt Box in July 2023, alleging involvement in an illegal $50 million crypto scheme.

Debt Box countered the SEC’s claims by filing documents alleging inaccuracies in the commission’s information, prompting the threat of penalties. The penalties against the agency required it to cover “all attorneys’ fees and costs arising from the ex parte relief.”

However, the regulator sought to avoid sanctions by contesting the charge of acting in bad faith. In January, the SEC tried to close the case, saying the penalties were unwarranted. In an earlier ruling, Judge Shelby found that the SEC’s legal representatives intentionally submitted inaccurate information, fully aware that they could not obtain the restraining order and asset freeze otherwise.

Over regulation

This case started discussions within the cryptocurrency community, with many seeing it as an example of overregulation. The SEC has ongoing legal battles with several crypto companies, including Binance, Kraken, Ripple and Coinbase.

Amid these developments, several lawmakers in the US Congress have advocated for regulatory clarity on digital assets and pushed for legislative action.

🚀 We have some great news to share with our DEBT Box community today!

The US District Court for the District of Utah has officially dismissed the SEC’s case against us without prejudice. This means the case is closed and any future action by the SEC should go… pic.twitter.com/aGiNVxMYbz

— DEBT (@TheDebtBox) May 28, 2024

The Debt Box team welcomed the court’s decision, calling it a “monumental victory” for their company, the entire industry and their community. They emphasized the importance of integrity and fairness in regulatory practices.

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