Judge slams SEC for ‘gross abuse of power’ in crypto case, imposes sanctions

By Leo Schwartz. (Fortune Crypto). 3/18/24.

On Monday, a federal judge took the unprecedented step of imposing sanctions on the Securities and Exchange Commission related to a lawsuit the agency brought against the Utah-based crypto company DEBT Box in July.

The case drew widespread attention after the defendants accused the SEC of misrepresenting key facts when the agency obtained a temporary restraining order to freeze assets on the crypto platform. After U.S. District Judge Robert Shelby ordered the SEC to explain its actions, lawyers for the agency admitted the SEC had committed errors, but asked Shelby not to issue a formal punishment.

In Monday’s decision, Shelby denied the SEC’s request, citing multiple instances of “bad faith” conduct and finding the agency responsible for a “gross abuse of power.” In the 80-page filing, Shelby imposed a sanction in the form of a requirement for the agency to pay for DEBT Box’s attorneys’ fees and costs related to the restraining order. The judge also denied the SEC’s motion to dismiss the lawsuit without prejudice, which would have meant the agency could bring the lawsuit again at a later date.

“[The SEC’s conduct] substantially undermined the integrity of these proceedings and the judicial process,” Shelby wrote.

Read more here: Fortune Crypto.

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