A judge said the SEC’s lawyers could face penalties for making untrue arguments that led to a court order freezing a crypto company’s assets.
The judge expressed concern that the SEC attorneys had presented false and misleading information, according to a court document filed on Thursday. The court had imposed a temporary restraining order on the crypto firm Debt Box based on these arguments.
SEC Lawyers in Trouble for ‘Misleading’ Statements in Debt Box Crypto Case
U.S. District Judge Robert Shelby has issued an order indicating that Securities and Exchange Commission (SEC) attorneys may be sanctioned for presenting “misleading” arguments regarding crypto project Debt Box.
The alleged misinformation suggested efforts by Debt Box to transfer assets and investors’ funds overseas, resulting in a court freezing the project’s bank accounts. Judge Shelby emphasized that the SEC’s “misrepresentations” not only compromised the case’s integrity but also caused “irreparable harm” to Debt Box.
Sanctions in such cases typically involve monetary fines, as per Law.com’s legal dictionary. The SEC sued Debt Box in July, accusing the company of selling unregistered securities through “node licenses.”
Despite initially imposing a restraining order, the judge later dissolved it when Debt Box demonstrated its compliance.
The SEC now has two weeks to respond to Judge Shelby’s inquiry about the misleading arguments. The SEC’s Utah office has yet to comment on the matter.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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