A federal judge has ruled that the United States Securities and Exchange Commission (SEC) must pay approximately $1.8 million in attorney and receivership fees related to its civil case against Digital Licensing, also known as Debt Box. The order, signed by Judge Robert Shelby on May 28 in the U.S. District Court for the District of Utah, states that the SEC must pay around $1 million for attorney fees and costs, as well as $750,000 for receiver fees and costs. This ruling came on the same day that the case was dismissed without prejudice.
Judge Shelby referred to a previous ruling in March, where the court determined that the SEC had engaged in bad faith conduct regarding a temporary restraining order to freeze Debt Box’s assets. The firm subsequently submitted documents to the court, claiming that the information provided by the commission was inaccurate and resulting in the possibility of sanctions.
As a result of the sanctions against the SEC, the commission is required to cover all attorney fees and costs arising from the relief that was improperly granted ex parte. Judge Shelby essentially agreed that all costs requested by the defendants in the case were appropriate, with the exception of a $649 fee.
Debt Box expressed their satisfaction with the ruling, stating that it is a significant win for them and means that the SEC cannot proceed with the case in its current state. The SEC had filed a lawsuit against Debt Box in July 2023, accusing the firm of engaging in an illegal $50 million cryptocurrency scheme. However, since Debt Box presented evidence suggesting that the commission had made false statements and misrepresentations in their attempt to obtain a temporary restraining order, many individuals in the cryptocurrency industry have viewed this case as an example of regulatory overreach.
The SEC currently has ongoing lawsuits against several other cryptocurrency firms, including Binance, Kraken, Ripple, and Coinbase. Many lawmakers in the U.S. Congress have been advocating for regulatory clarity at the SEC regarding digital assets, and they have introduced legislation such as the Financial Innovation and Technology for the 21st Century Act to address this issue.
In the world of cryptocurrency, the SEC is facing a tough battle against the legal firepower of industry giants.