SEC to Close Office Following DEBT Box Case Dismissal

In a significant legal setback, the U.S. Securities and Exchange Commission (SEC) has been ordered to pay $1.8 million after a federal judge cited “bad faith conduct” in its temporary restraining order to freeze DEBT Box’s assets. This ruling has prompted the SEC to announce the closure of its Salt Lake Regional Office in 2024.

The closure decision, detailed in a June 4 notice from the SEC, highlights the commission’s plan to consolidate its operations into its Denver office, citing “significant attrition” at the Salt Lake City location. This move follows Judge Robert Shelby’s dismissal of the SEC’s civil lawsuit against Digital Licensing, known as DEBT Box, and his mandate for the SEC to cover approximately $1 million in attorney fees and costs, along with $750,000 in receiver fees and costs.

Initially filed in July 2023, the SEC’s lawsuit accused DEBT Box of orchestrating a $50 million crypto scheme. However, by March, Judge Shelby determined the SEC had acted in “bad faith” concerning the restraining order, leading to sanctions requiring the SEC to pay all legal fees incurred due to the improperly issued ex parte relief.

The fallout from the case has been notable, with two SEC attorneys from the Salt Lake office resigning, possibly contributing to the attrition referenced by the commission. DEBT Box’s Chief Marketing Officer, Miguel Francis-Santiago, stated that the office closure directly responds to what he described as a “gross misuse of power” in handling the case.

Amid these developments, the SEC continues to pursue enforcement actions against other major cryptocurrency firms, including Coinbase, Binance, Kraken, and Ripple. Notably, Terraform Labs and its co-founder Do Kwon recently reached a preliminary settlement with the SEC, indicating ongoing regulatory activity despite the setbacks.

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