SEC plans to dismiss case against DEBT Box after admitting inaccurate statements were made

The Securities and Exchange Commission is looking to dismiss its lawsuit against crypto startup DEBT Box after the agency’s lawyers admitted inaccurate statements were made in court.

The agency, which first sued Digital Licensing Inc., doing business as DEBT Box, in July, told Utah U.S. District Court Judge Robert Shelby that it planned to dismiss the action without prejudice, meaning the SEC can still refile its case.

“The Commission has determined that the best way to proceed is to dismiss this action without prejudice. Thus, the Commission has authorized the filing of a motion to dismiss this action without prejudice, which will be forthcoming,” SEC lawyers said in a filing on Tuesday.

The SEC admitted in late December that it made inaccurate statements and said it “fell short” of the expectations to be accurate and candid in the court. Judge Shelby had criticized the agency’s lawyers and ordered the SEC to explain “false or misleading” statements after it claimed the company was trying to move assets overseas in order to escape the regulator’s jurisdiction.

Sanctions

The SEC also said sanctions were not warranted. Judge Shelby had ordered the SEC late last year to explain why sanctions should not be imposed upon its lawyers.

“While the Commission recognizes that its attorneys should have been more forthcoming with the Court, sanctions are not appropriate or necessary to address those issues,” the SEC said on Tuesday.

An SEC spokesperson declined to comment beyond the public filings. The SEC has brought multiple lawsuits against crypto firms over the past year, and its chair Gary Gensler has repeatedly said most cryptocurrencies are securities.

The SEC’s suit against DEBT Box alleged it defrauded thousands of investors of at least $49 million by offering customers so-called “node licenses” to receive revenue from mining 11 tokens, though they were never mined.

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