The securities watchdog is under fire for lying in court
A US district court has sanctioned the Securities and Exchange Commission (SEC) for functioning in “bad faith” in its lawsuit against Debt Box. The case is another example of the securities watchdog’s attempt to manipulate the cryptocurrency ecosystem.
The SEC originally filed a motion to dismiss without prejudice, which was denied by Judge Robert J. Shelby, who denounced the regulator for deliberately lying to the court about the evidence it acquired when seeking a temporary restraining order (TRO) last August to freeze Debt Box’s assets.
“The Commission’s above-discussed 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,” declared Shelby in the March 18 filing.
The “critical evidence” the SEC suggested to have obtained “lacked any basis,” which was nevertheless submitted in “deliberately false and misleading ways,” he explained. “The bad faith is inextricable from the abusive conduct, and a sanction of attorneys’ fees and costs for all expenses resulting from that conduct is appropriate.”
The SEC claimed in its August lawsuit that Debt Box initiated a $50-million fraudulent crypto scheme while operating to provide software mining licenses. The regulator contended that Debt Box had already moved $720,000 in assets overseas and was planning to flee to the United Arab Emirates to secretly transfer additional funds if it was informed of the order.
The court initially approved the request. However, Shelby later examined his initial ruling, concluding that the SEC falsified evidence and that the $720,000 transfer was sent within the US.
Shelby focused on SEC attorney Michael Welsh for attempting to mislead the court, saying he knew the TRO statement was incorrect and attempted to shift the language to perpetuate the misconduct.
