A federal judge has ruled that the United States Securities and Exchange Commission (SEC) must pay approximately $1.8 million in attorney and receivership fees related to its civil case against Digital Licensing, also known as Debt Box. The judge’s order, signed on May 28 in the U.S. District Court for the District of Utah, requires the SEC to pay around $1 million for attorney fees and costs, as well as $750,000 for receiver fees and costs. This decision was made on the same day that the case was dismissed without prejudice.
Judge Robert Shelby referred to a previous ruling in March, where the court found that the SEC had engaged in bad faith conduct regarding a temporary restraining order to freeze Debt Box’s assets. Debt Box later presented evidence to the court, claiming that the information provided by the commission was inaccurate and could result in sanctions.
As a result of the sanctions imposed on the SEC, the commission is responsible for covering all attorney fees and costs arising from the improperly obtained ex parte relief. Judge Shelby determined that all costs requested by the defendants in the case were appropriate, with the exception of a $649 fee.
Debt Box expressed their satisfaction with the ruling in a post on May 28, stating that it prevents the SEC from proceeding with the case in its current form. The SEC had filed a lawsuit against Debt Box in July 2023, accusing the firm of participating in an illegal $50 million cryptocurrency scheme. Since Debt Box presented evidence suggesting that the commission had made false statements and misrepresentations in obtaining the temporary restraining order, many in the cryptocurrency industry have criticized the SEC for regulatory overreach.
The SEC is currently involved in ongoing lawsuits against several cryptocurrency firms, including Binance, Kraken, Ripple, and Coinbase. Numerous lawmakers in the U.S. Congress have been advocating for regulatory clarity at the SEC regarding digital assets, using legislation such as the Financial Innovation and Technology for the 21st Century Act.
In the world of cryptocurrency, the SEC is facing a challenging battle against the legal firepower of Godzilla vs. Kong.