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Highlights
- Debt Box is moving for outright denial of SEC's dismissal request
- Debt Box believes SEC is exhibiting double standards
- Industry frowns at SEC's crypto overreach
In a new development, decentralized blockchain protocol Debt Box has requested that the United States court sanction the Securities and Exchange Commission (SEC) for gross misconduct. The platform also demands an outright denial of SEC’s motion to dismiss the case it filed against it.
SEC is Exploring a Way Out of Debt Box
Last month, the Securities and Exchange Commission (SEC) began to push for the dismissal of its lawsuit against Debt Box after admitting to supplying the court with inaccurate statements about the firm. It is believed that the SEC opted for this option out of fear of a possible sanction from the court.
For context, the securities regulator accused Debt Box in July 2023 of deceiving investors and defrauding them of almost $50 million. SEC began to clamor for swift enforcement against the crypto firm and to achieve this, the regulator went ahead to request emergency relief measures, including a temporary restraining order and asset seizure against Debt Box.
The Court wasted no time in granting this request, believing that the allegations levied by the SEC were born out of intense scrutiny of the defendant. It was not until the time Debt Box decided to contest the unpleasant accusations against it that the court discovered the discrepancies in SEC’s testimony.
SEC Receiving Massive Backlash from Industry
Surprisingly, the regulator admitted to its offense, blaming the urgency of the situation as the reason behind the misleading testimony.
Upon acknowledging the blunder, the SEC received condemnation and backlash for its false statement from the broader crypto market. Coinbase’s Chief Legal Officer (CLO), Paul Grewal, suggested that there was a lack of accountability within the regulatory body, adding that the agency remained silent in the face of its admitted deception.
Similarly, Stuart Alderoty, Ripple’s Chief Legal Officer, faulted the SEC Chair’s leadership. He reiterated that the Gary Gensler-led agency is operating like a “police state,” which is “exempt from consequences of its actions.”
Some other observers believe that the SEC is overreaching its jurisdiction by delving into matters like that of the Debt Box.
It was right amid these scoldings that Debt Box asked the judge presiding over its lawsuit with the SEC to deny the regulator’s motion for dismissal. In the meantime, hands are folded in anticipation of what the judge’s verdict will be, whether it would dismiss the case as requested by the SEC or continue with it and also levy the regulator with gross misconduct.
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