The U.S. Securities and Exchange Commission (SEC) has admitted to making a false statement in an ongoing crypto fraud case after being questioned by a judge. In July, the SEC obtained a temporary asset freeze against Digital Licensing Inc., also known as “DEBT Box,” accusing the company of operating a fraudulent scheme. The SEC claimed that DEBT Box and its founders were using investor funds for luxury purchases and overseas accounts. However, the defendants filed a motion to dissolve the restraining order, alleging that the SEC misrepresented facts. The court later requested an explanation from the SEC about the alleged misrepresentations.
In response, the SEC acknowledged that one of its lawyers made an inaccurate representation during the initial hearing. The lawyer claimed that 33 bank accounts were closed by the defendants in the 48 hours leading up to the court date. However, the SEC now admits that only 24 bank accounts were closed, and none were closed in the month of the hearing. The regulator acknowledges multiple instances where it presented interpretations and inferences as facts. The SEC states that it takes the judge’s concerns seriously, regrets its errors, and is taking steps to avoid repeating them.
Despite admitting to inaccuracies, the SEC argues that these errors do not warrant sanctions.
Hot Take: U.S. SEC Acknowledges Inaccurate Statement in Crypto Fraud Case
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