DEBT Box and other defendants in the Securities and Exchange Commission lawsuit want the case thrown out after a court found the agency lied to secure a temporary restraining order against them.
“The SEC got this wrong. It’s a terrible mistake,” said an attorney for Digital Licensing Inc., which does business as DEBT Box. Said Utah Federal Court Judge Robert Shelby filed the motion to dismiss on December 4th. “The SEC should not be allowed to continue spinning false narratives to avoid dismissal,” he said.
On August 3, the SEC won a temporary restraining order freezing DEBT Box assets, arguing that the company would delete evidence and secretly transfer assets overseas if notified that the order would be imposed.
The agency accused the company of running a $50 million fraudulent crypto scheme. DEBT Box sold software mining licenses tied to real-world assets that the SEC claimed were unregistered securities. The defendant disputes this contention.
“Such allegations are not only false, they also fail basic pleading standards,” the group said in its latest motion.
federal court in utah reversed The Nov. 30 asset freeze alleged that the SEC misrepresented evidence by claiming that DEBT Box intended to close its bank accounts and move to the United Arab Emirates to escape the SEC’s jurisdiction.
The court found that the company had not closed its bank accounts and that the $720,000 the SEC said it sent overseas was actually sent domestically.
![](https://s3.cointelegraph.com/uploads/2023-12/b8833700-fd92-454d-b727-da29f1d9f1e8.png)
DEBT Box said the SEC “misrepresents the current state of law regarding crypto assets” with “fatally flawed arguments.”
Because of the SEC’s misrepresentations, Judge Shelby issued a “show cause order,” requiring regulators to show why they should not be penalized for their actions.
Ripple executive says SEC’s ‘shocking’ actions deserve punishment
Ripple’s chief technology officer, David Schwartz, called the SEC’s actions “shocking.”
“The SEC went to a judge for an emergency order that paralyzed multiple companies and blatantly misrepresented the facts to get the order before anyone on the other side could mount a defense,” he said. Said In a post on X (Twitter) on December 5th.
Related: ‘We had to change our strategy’ says SEC enforcement chief on recent actions: report
Pro-Ripple lawyer John Deaton hopes regulators will be forced to pay for the damage done to DEBT boxes.
The Debt Vault case forced Judge Netburn to reveal to the world that SEC lawyers “lacked faithful allegiance to the law” and would do or say anything to further their own agenda. This is a good example of why people no longer get the benefits.
In Debt Box, the SEC successfully secured a temporary seizure… https://t.co/Qr2jrOyb1J
— John E. Deaton (@JohnEDeaton1) December 5, 2023
DEBT Box’s four principals, Jason Anderson, his brother Jacob Anderson, Shad Brannon, and Roydon Nelson, and 13 others joined the SEC’s lawsuit.
magazine: Cryptocurrency Regulation: Does SEC Chairman Gary Gensler have the final say?