Judge Orders SEC To Pay $1.8 Million, Dismisses ‘Bad Faith’ Debt Box Case

INTERNATIONAL BUSINESS TIMES NEWSLETTER SIGNUP My account Log Out May 29, 1:50 AM EDT World U.S. Economy & Markets Companies Technology Digital Life Culture Sports Crypto Opinion NEWSLETTER My account Log Out US Edition World U.S. Economy & Markets Companies Technology Digital Life Culture Sports Crypto Opinion Listings & More Spotlight Glossary SMB Forum Glossary K-Wave CEO Spotlight Editions Australia Edition India Edition International Edition Singapore Edition United Kingdom United States NEWSLETTER Follow Us Editions Australia Edition India Edition International Edition Singapore Edition United Kingdom United States Crypto Judge Orders SEC To Pay $1.8 Million, Dismisses ‘Bad Faith’ Debt Box Case By Marvie Basilan @marvbuzzilan Published 05/29/24 AT 1:50 AM EDT Share on Facebook Share on Twitter Share on LinkedIn Share on Reddit Share on Flipboard Share on Pocket The seal of the U.S. Securities and Exchange Commission (SEC) is seen at their headquarters in Washington, D.C. Reuters KEY POINTS Judge Shelby said defendants were victims of the “misconduct” committed by some SEC attorneys The SEC admitted in December that certain Commission lawyers were not forthcoming with the court Some GOP lawmakers have criticized the regulator for its “unconscionable” handling of the case The U.S. Securities and Exchange Commission (SEC) has been ordered by a federal judge to pay over a million dollars for its controversial case against cryptocurrency firm Digital Licensing, which goes by the business name Debt Box. Judge Robert Shelby dismissed the case and ordered the Wall Street regulator to pay roughly $1.8 million in legal fees and related costs as requested by Debt Box and other defendants. Only one defendant’s petition for sanctions on the SEC was denied, as per a Tuesday court filing. “Akin to the attorney fee sanction under § 1927 in Hamilton , the sanction here is the result of bad faith conduct on the part of certain Commission attorneys. Defendants have already been the victim of this misconduct and they should not be ‘revictimized’ by being required to establish the prevailing local rates for this type of litigation,” Shelby wrote. Shelby also quoted a ruling in mid-March wherein the court found that the SEC “engaged in bad faith conduct in obtaining and defending” the temporary restraining order (TRO) it sought against Debt Box in July last year. The SEC filed its TRO application simultaneously with a receivership request and a complaint it filed against the crypto project for alleged violations of federal securities laws. It also requested that Debt Box assets be frozen, which the court approved. Spot ETH ETF Approvals Have Become A ‘Giant Political Issue’: Ethereum Co-Founder Read more Spot ETH ETF Approvals Have Become A ‘Giant Political Issue’: Ethereum Co-Founder The court dissolved the TRO and receivership in October after the court found that some of the statements made by the regulator’s legal counsel in the case were “false or misleading.” At the time, Shelby warned of potential sanctions over the findings. By December, the SEC had filed to get its lawsuit against Debt Box dismissed , saying its legal counsel “should have been more forthcoming with the Court” but that sanctions were not necessary as it would review allegations and evidence on the case. The crypto project blasted the regulator for the said move, accusing the SEC for wanting to be treated “differently before federal courts than those that it regulates or attempts to regulate.” Several lawmakers have criticized the SEC for its handling of the case. A group of Republican senators with the Senate Banking Committee said they were concerned over the Commission’s “unconscionable” actions, especially for a federal agency regularly involved in “highly consequential legal procedures.” They said the regulator’s actions regarding the Debt Box case “suggests other enforcement cases brought by the Commission may be deserving of scrutiny.” The SEC has been under fire in recent months amid its ongoing lawsuits against crypto firms including some of the largest companies in the emerging sector such as Ripple , and its succeeding Wells Notices issued to prominent firms in the industry, including the crypto arm of Robinhood. Read more White House, Gensler Flip As Democratic Reps Help Pass FIT21 For Crypto Regulation SEC Has ‘Implicitly Stated’ ETH Is A Commodity After Ethereum ETF Approvals: Expert © Copyright IBTimes 2024. All rights reserved. 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