A federal judge has ordered the United States Securities and Exchange Commission (SEC) to pay approximately $1.8 million in attorney and receivership fees in its civil case against Digital Licensing, known as Debt Box.
In a May 28 filing in the U.S. District Court for the District of Utah, Judge Robert Shelby mandated the SEC to cover around $1 million for attorney fees and costs, and $750,000 for receiver fees and costs. The dismissal of the case without prejudice was signed off on the same day.
The judge cited a March ruling that found the SEC “engaged in bad faith conduct” over a temporary restraining order to freeze Debt Box’s assets. Debt Box subsequently provided documents asserting the SEC’s information was incorrect, leading to potential sanctions.
The sanctions required the SEC to pay “all attorney fees and costs arising from the improvidently entered ex parte relief.” Judge Shelby ruled nearly all of the defendants’ requested costs as “appropriate,” excluding a single $649 fee.
“This is a significant win for us,” said Debt Box in a May 28 X post. “It means that the SEC cannot proceed with the case as it stands.”
The firm also pinned a post announcing highlights of the ruling.
🚀 We have some fantastic news to share with our D.E.B.T. Box community today!
The U.S. 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 would have to go… pic.twitter.com/aGiNVxMYbz
— D.E.B.T. (@TheDebtBox) May 28, 2024
The SEC filed the lawsuit in July 2023, accusing Debt Box of running a $50 million illegal crypto scheme. However, the firm’s documentation suggested the SEC had made false statements to obtain a restraining order, which many in the crypto community see as an example of regulatory overreach.
The commission has several ongoing lawsuits against other crypto companies like Binance, Kraken, Ripple, and Coinbase. There is significant legislative pressure from U.S. lawmakers to clarify SEC regulations on digital assets, exemplified by the Financial Innovation and Technology for the 21st Century Act.
