The Securities and Exchange Commission (SEC) has issued an apology for its handling of a case against Digital Licensing Inc., also known as DEBT Box. This apology came after the SEC was accused of presenting misleading facts in its efforts to secure a restraining order and asset freeze against the crypto firm. SEC enforcement chief Gurbir Grewal acknowledged the lapse, emphasizing the agency’s commitment to enforcing federal securities laws with integrity.
The case, which began in July, involved allegations from the SEC that DEBT Box defrauded investors of nearly $50 million. In pursuit of swift action, the SEC filed for emergency relief measures, including a temporary restraining order and asset seizure. However, the agency’s haste led to the presentation of inaccurate information. This misrepresentation came to light after the defendants challenged the SEC’s assertions, revealing discrepancies such as misinterpreted bank account activities and the timeline of the company’s operational shifts.
Following a strong directive from U.S. District Judge Robert Shelby to clarify its actions, the SEC submitted a detailed response. The agency admitted to errors in judgment, attributing them to the rush to prepare emergency applications. The SEC’s staff, for instance, inferred certain activities of DEBT Box based on indirect evidence, like a YouTube video, leading to an inaccurate portrayal of the situation.
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