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US SEC Sanctioned Over Disputed Restraining Order
The US Securities and Exchange Commission (SEC) has faced sanctions regarding its contested restraining order against the cryptocurrency firm DEBT Box, as detailed in a court filing from March 18. Due to the SEC’s misconduct, the court has mandated the commission to cover the legal fees, costs, and expenses incurred by DEBT Box. This ruling serves as a strong reprimand to the regulatory body and emphasizes the significance of adhering to legal and ethical standards.
Both DEBT Box and the receivers are required to submit petitions for fees within the next 30 days. The specific amount to be paid by the SEC remains undisclosed. Some individuals have expressed worries that these payments will be funded by taxpayers. Coinbase Chief Legal Officer Paul Grewal has suggested that the sanctions will ultimately be borne by “every US taxpayer,” asserting that the SEC has imposed a financial burden on all citizens due to their litigation misconduct.
The current filing also rejects the SEC’s previous motion to dismiss the case without prejudice, a move that would have allowed the commission to terminate the ongoing proceedings and potentially refile the case. Despite the SEC’s desire to halt the case, this recent development does not signify its conclusion. The court must still assess the justification for the SEC’s pursuit of the controversial restraining order by scrutinizing the regulator’s statements.
Judge Robert Shelby criticized the SEC’s handling of the matter, denouncing, “The [SEC’s conduct] constitutes a gross abuse of the power entrusted to it by Congress and substantially undermined the integrity of these proceedings and the judicial process.”
The controversy originated when the SEC implemented a temporary restraining order (TRO) and asset freeze against DEBT Box, alleging the firm’s involvement in a fraudulent $50 million cryptocurrency scheme. Subsequent revelations indicated that the SEC had provided the court with inaccurate details, including unfounded accusations regarding a $720,000 transaction that purported to be an international transfer but was, in reality, an internal transaction within the United States.
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