A US Judge has ordered the Securities and Exchange Commission to pay $1.8 million in fees to cover legal costs in its Debt Box lawsuit. The Judge found that the SEC abused its authority in the case, and will now need to pay fines on behalf of the crypto platform.
The court order includes almost $747,000 for a court-appointed receiver, according to Judge Robert Shelby of Utah. Shelby previously sanctioned the regulator for “gross abuse of power” in the case, including false statements made by the SEC’s lawyers. The SEC will have to pay nearly $600,000 to Debt Box in fees and costs as part of the ruling.
The sanctions against the SEC require the regulator to cover “all attorney fees and costs arising from the improvidently entered ex parte relief.” Judge Shelby ruled that all costs requested by the defendants in the case were “appropriate,” except a single $649 fee.
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“This is a significant win for us,” said Debt Box in a post to X (formerly Twitter). “It means that the SEC cannot proceed with the case as it stands.”
The SEC filed their lawsuit against Debt Box in July 2023. The regulator accused DEBT Box and its executives of defrauding investors of at least $49 million. While Judge Shelby immediately sided with the SEC and forced the company to freeze its assets, he eventually found that the regulator made “materially false and misleading representations.” Thus, he changed his mind and incited the sanctions.
Multiple SEC lawyers resigned after Judge Shelby sanctioned the agency. However, now they are involved in the parties that must pay back Debt Box.