DEBT Box Urges Judge to Dismiss SEC Lawsuit, Alleging Misrepresentation

The Case in Question

DEBT Box and other defendants in a lawsuit brought by the Securities and Exchange Commission (SEC) are calling for the case to be dismissed. This comes after the court found that the SEC had lied in order to obtain a temporary restraining order against them. Lawyers representing Digital Licensing Inc., which operates as DEBT Box, argue that the SEC's allegations are false and fail to meet basic pleading standards.

Frozen Assets and Fraudulent Scheme Claims

The SEC had initially won a temporary restraining order to freeze DEBT Box's assets, claiming that the company would remove evidence and transfer assets overseas if they were given notice of the order. The agency accused DEBT Box of running a fraudulent crypto scheme worth $50 million. DEBT Box, on the other hand, denies these allegations and asserts that the SEC is misrepresenting the state of the law regarding crypto assets.

Court's Reversal and Misrepresented Evidence

A Utah federal court reversed the asset freeze on November 30 after finding that the SEC had misrepresented evidence. The court determined that DEBT Box had not closed its bank accounts and that a $720,000 transfer was made domestically, rather than overseas as claimed by the SEC. As a result, Judge Robert Shelby issued a "show cause order" requiring the SEC to provide reasons why it should not face penalties for its actions.

Ripple Executives Speak Out

Executives at Ripple, a major cryptocurrency company, have criticized the SEC's behavior in the DEBT Box case. Ripple's chief technology officer, David Schwartz, called it "shocking" and accused the SEC of misrepresenting facts to obtain an emergency order without giving the defendants a chance to defend themselves. Pro-Ripple lawyer John Deaton hopes that the SEC will be held accountable for the damage caused to DEBT Box.