SEC Lawyers Warned by Judge for ‘Misleading’ Request in Crypto Case
A federal judge has warned attorneys from the Securities and Exchange Commission (SEC) regarding their “false and misleading” arguments in a court filing.
The attorneys are accused of persuading the court to freeze the assets of a cryptocurrency firm based on misleading information, as revealed in a court order.
The order , issued by U.S. District Judge Robert Shelby of the U.S. District Court in Utah, highlights concerns about the SEC’s attorneys making deceptive claims regarding the crypto project Debt Box’s alleged attempts to transfer its assets and investors’ funds overseas.
These arguments led the court to freeze the project’s bank accounts.
Judge Shelby emphasized that the SEC’s “misrepresentations… undermined the integrity of the case’s proceedings” and caused “irreparable harm” to Debt Box.
Sanctions, as defined by Law.com’s legal dictionary, are penalties imposed by a court on individuals who knowingly provide false statements or violate court procedures.
In civil law, these penalties often take the form of monetary fines.
Initially, the federal judge had imposed a temporary restraining order on Debt Box in August, restricting the company’s access to its assets.
However, the order was later dissolved after Debt Box demonstrated that it had not moved any funds outside the U.S. or closed its bank accounts, as claimed by the SEC.
Debt Box’s lawyers highlighted this information in a filing.
At the time of reporting, the SEC’s Utah office had not responded to requests for comment on the matter.
The SEC initially filed a lawsuit against Debt Box in July, alleging that the company engaged in selling unregistered securities known as “node licenses” since 2021.
Debt Box purportedly misled investors by
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