Crypto

Blockchain tech company Debt Box accuses the SEC of fraud

Blockchain tech company Debt Box accuses the SEC of fraud

The accusations are the latest salvo in a battle between crypto and the securities regulator

The US Security and Exchange Commission (SEC) initially deceived a court to freeze Debt Box’s assets, which was since reversed, with the blockchain tech company citing the action as grounds to dismiss the lawsuit. Debt Box and other defendants now want the case thrown out after a court found the agency deceived it to request a temporary restraining order against them.

“The SEC got this case wrong. Badly wrong,” said lawyers for Digital Licensing, which operates as Debt Box, to Judge Robert Shelby of the US District Court in Utah while presenting a December 4 motion to dismiss. “The SEC should not be allowed to continue to spin a false narrative to avoid dismissal.”

The SEC won the temporary restraining order to freeze the company’s assets on August 3, contending the firm would discreetly transfer assets overseas if notified the order would be levied on them.

Debt Box was accused of executing a $50-million fraudulent crypto scheme. It was also charged with selling unregistered securities after selling software mining licenses connected to real-world assets, which the defendants also deny.

“Not only are such allegations false, but they also fail to meet the basic pleading standards,” wrote Debt Box in its latest motion.

The Utah federal court released Debt Box’s assets on November 30, citing that the agency misrepresented the evidence by asserting Debt Box had closed bank accounts and planned to escape to the United Arab Emirates.

The court discovered that Debt Box had not closed the bank accounts, and the $720,000 allegedly transferred offshore was sent domestically.

The SEC “misrepresents the state of law regarding crypto assets” in its “fatally flawed pleading,” said Debt Box. The company’s four principals, Jason and Jacob Anderson, Schad Brannon, Roydon Nelson and 13 others were named in the SEC’s action.

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