US Senators Express Concerns Over SEC’s Handling of Crypto Case
Following the recent dismissal of the case against crypto firm Digital Licensing by the US Securities and Exchange Commission (SEC), a group of US Senators have sent a letter to the agency’s chair, Gary Gensler, expressing concerns about the handling of the case.
SEC’s “Unethical” Proceedings In Crypto Case
Five republican US senators signed a letter addressed to US SEC Chairman Gary Gensler, voicing their worry regarding the agency’s “enforcement proceedings” during the case against the crypto firm operating under the name ‘DEBT Box.’ They highlighted some of the SEC’s questionable proceedings, including a temporary freeze of the firm and the company principals’ assets. The senators consider that the SEC had operated in “an unethical and unprofessional manner” while handling the case against the crypto firm.
The letter also criticizes the commission’s comment about its failure to correct inaccurate information presented by SEC attorneys after becoming aware of it. Lastly, The senators closed their letter suggesting that handling the DEBT Box case brings scrutiny to similar cases conducted by the SEC, damages public confidence in the commission, and puts into question the agency’s mission to protect investors.
DEBT Box Case Overview
Last year, the SEC sought legal action against DEBT Box for alleged involvement in a fraudulent crypto scheme. The scheme involved the $50 million sale of unregistered crypto asset securities to US investors. The US regulator obtained a temporary asset freeze for DEBT Box and personal assets from defendants including company principals Jason Anderson, Jacob Anderson, Schad Brannon, and Roydon Nelson. The actions taken by the US agency caused the temporary shutdown of DEBT Box and a crash in its native token DEBT by more than 56%.
SEC Dismisses Case Due to Misleading Statements
After District Judge Robert J. Shelby reviewed the case, the SEC faced the possibility of sanctions due to inaccurate statements. The revelation of the agency’s misleading handling of the case led the SEC to dismiss the case on January 30, 2024. The US SEC admitted that “its attorneys should have been more forthcoming with the Court” but ultimately reserved the opportunity to file a new suit against the crypto firm by dismissing the case “without prejudice.”
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