The United States Securities and Exchange Commission (SEC) is set to shut down one of its regional offices following a court ruling that ordered the regulator to pay approximately $1.8 million in attorney and receivership fees.
According to a notice issued by the SEC on June 4, the Salt Lake Regional Office will be closed in 2024, making it one of the eleven regional offices across the country. The decision to close the office was attributed to a significant decrease in staff and the commission’s plan to relocate its operations to Denver.
The announcement comes shortly after Judge Robert Shelby dismissed the SEC’s civil lawsuit against DEBT Box, a company accused of engaging in an illegal $50 million cryptocurrency scheme. The judge also approved an order requiring the SEC to pay around $1 million for attorney fees and costs, as well as $750,000 for receiver fees and costs.
The SEC initially filed the lawsuit against DEBT Box in July 2023, alleging the company’s involvement in fraudulent activities. However, in March, Judge Shelby found that the SEC had acted in bad faith by obtaining a temporary restraining order to freeze DEBT Box’s assets. As a result, the judge imposed sanctions on the SEC, ordering them to cover all attorney fees and costs related to the improperly granted relief.
It is worth noting that two SEC lawyers, who were based at the Salt Lake Regional Office, reportedly resigned due to concerns over the handling of the DEBT Box case. It remains unclear whether their departure contributed to the significant decrease in staff mentioned by the commission.
Miguel Francis-Santiago, the chief marketing officer of DEBT Box, claimed that the closure of the Salt Lake City office was a direct response to the dismissal of the case and criticized the SEC for what he called a “gross misuse of power.” He emphasized the need for the case to be reviewed by Judge Shelby to prevent any further misconduct or abuse of power by the SEC.
The SEC continues to pursue enforcement actions against various cryptocurrency firms, including Coinbase, Binance, Kraken, and Ripple. In May, Terraform Labs and its co-founder Do Kwon announced that they had reached a preliminary settlement in their case with the SEC.
Update (June 4 at 9:25 pm UTC): This article has been updated to include a statement from DEBT Box.