US SEC Secures Restraining Order Against Firm Accused of Crypto Fraud

The United States Securities and Exchange Commission (SEC) has secured a restraining order against Digital Licensing Inc, a Draper, Utah-based startup. The restraining order was also filed against the company’s four executives Jason Anderson, his brother Jacob Anderson, Schad Brannon, and Roydon Nelson, and 13 other defendants.

The US SEC Rationale for the Charges

According to the markets regulator, the restraining order became important as the company, operating as a DEBT Box, was involved in what it termed a “fraudulent scheme to sell crypto asset securities to hundreds of U.S. investors that raised approximately $50 million and unspecified amounts of Bitcoin and Ether.”

The SEC said the accused firm and the indicted individuals began their fraudulent scheme as far back as March 2021 to sell unregistered securities in the form of a “node license.”

The company and the accused fraud scheme promised investors that the mined tokens will be featured in high-profile business ventures that would contribute to their valuation increase over time. These promises were all documented as they were made through social media posts and at a series of investor meetings.

At this time, the SEC said it chose to file the lawsuit against the firm in a bid to protect investors, seeing every aspect of the promises made turned out to be lie.

“We allege that DEBT Box and its principals lied to investors about virtually every material aspect of their unregistered offering of securities, including by falsely stating that they were engaged in crypto asset mining,” said Tracy S. Combs, Director of the SEC’s Salt Lake Regional Office. “We filed this emergency action to protect the victims of the defendants’ unlawful actions and stop further harm.”

Based on the complaints, the SEC wants permanent Injunctive Relief and the forfeiture of all gains secured as well as the payment of a civil fee.

Mix of Interest in SEC’s Crypto Securities War

The US SEC plays a very crucial role in keeping the reins on fraudulent entities exploiting users in the digital currency ecosystem. Despite the nobility of its war, the Commission often interwove it by cracking down on more transparent businesses such as Ripple Labs, Coinbase, and Binance exchange respectively.

The twist in its fight has earned the US SEC a bitter sweet praise in its enforcement actions in the crypto ecosystem thus far.