REGULATION

SEC sanctioned for presenting false evidence in lawsuit: deliberate deception, serious abuse of power

share
SEC sanctioned for presenting false evidence in lawsuit: deliberate deception, serious abuse of power

A federal judge ruled yesterday, the 18th, that the U.S. Securities and Exchange Commission (SEC) presented false evidence in its lawsuit against the cryptocurrency company DEBT Box in seeking a temporary restraining order; emphasizing that this conduct constituted "serious misconduct," and ordering the SEC to pay all legal fees for DEBT Box.

Judge Accuses SEC of Serious Abuse of Power

Utah District Court Judge Robert Shelby issued an order on Monday in the SEC v. DEBT Box case, stating that the SEC intentionally provided false evidence to the court to secure a Temporary Restraining Order (TRO) against Debt Box, including asset freezes and company takeover:

The so-called "key evidence" presented by the SEC lacked any basis and was intentionally presented in a fabricated and misleading manner.

Furthermore, "the Commission has cleverly taken advantage of its status as a federal agency, seriously abused its authority, and undermined the fairness of the judicial process."

In response, Robert ruled that SEC attorneys engaged in "reckless behavior" in the litigation and ordered them to pay all of DEBT Box's legal fees as sanctions.

SEC's False Statements Exposed

It was reported that the SEC filed a lawsuit against DEBT Box in August last year, alleging that the company used fictitious "node licenses" to falsely claim to investors that they could earn profits from mining 11 types of tokens, defrauding at least $49 million:

We allege that DEBT Box and its principals, while engaged in unregistered securities offerings, also lied to investors by claiming they were engaged in cryptocurrency mining.

Now, the press release regarding this accusation has been removed.

Cryptocurrency mining company Digital Licensing sued by SEC for $50 million fraud

The SEC had claimed at the time that the company had transferred funds overseas and might flee the United States, seeking court approval for a temporary restraining order.

However, in a subsequent review, Robert found false statements by the SEC and pointed out that the company's funds had always remained within the United States.

SEC Admits Negligence, Motion to Dismiss Case Denied

In December, the SEC admitted to making inaccurate statements in court, failing to meet the court's expectations of candor, and subsequently moved to unconditionally dismiss the lawsuit to terminate the case.

Did SEC deceive with a request for a temporary restraining order? US Utah judge criticizes SEC's false statements

However, the judge rejected the motion yesterday, criticizing SEC attorney Michael Welsh for continually changing his narrative to cover up misconduct.

ZK Advisor Founder Criticizes SEC and Calls for Reform

ZK Advisor Founder Austin Campbell stated that SEC employees involved in this case should be fired, and the agency needs reform.

SEC Accused of Overstepping Authority Not the First Time

Two weeks ago, officials from multiple states jointly filed an amicus brief against the SEC in the SEC v. Kraken lawsuit, emphasizing that the SEC's enforcement actions are harming consumers and overly broadening the definition of "investment contracts":

States strongly oppose the SEC's attempt to classify cryptocurrencies as securities, a move that could prioritize future similar cases under federal law, whereas specific state laws are more suitable for protecting consumer rights.

Additionally, "the SEC's unauthorized power expansion poses risks to consumers."

Controversy Surrounds SEC's Lawsuit Against Kraken as Multiple State Officials Accuse SEC of Severe Overreach