US SEC admits mistakes in lawsuit against virtual currency companies and apologizes
Admit mistake in DEBT Box lawsuit
The U.S. Securities and Exchange Commission (SEC) filed court documents on the 21st in the U.S. District Court for the District of Utah, alleging inaccurate statements made in a lawsuit against crypto asset (virtual currency) company Digital Licensing Inc. (also known as DEBT Box). admitted that there was.
However, they also argue that DEBT Box’s assets should still be frozen. The SEC alleges that DEBT Box offered securities called “node licenses†to customers that purported to receive revenue from cryptocurrency mining, even though DEBT Box did not perform any actual mining operations.
The SEC filed a lawsuit against DEBT Box in July this year, alleging that it defrauded investors of more than 7.2 billion yen by selling unregistered securities. It had filed an application seeking a temporary restraining order (TRO) against the company.
However, the court later revoked the injunction, saying the SEC may have presented “misleading†evidence. The company was also seeking clarification from the SEC, with the possibility of sanctions being imposed on it.
connection: US federal judge orders SEC to disclose reasons for allegedly suing virtual currency company with insufficient evidence
This time, the SEC acknowledged its mistake and apologized as follows.
At a July 28 hearing, SEC lawyers made claims that were unknowingly inaccurate at the time. The lawyer also did not correct his statements even after learning they were inaccurate.
Additionally, SEC attorneys did not make clear that some of their representations were inferences from previously known facts rather than based on facts directly corroborated by the SEC. .
The SEC takes the court’s concerns seriously and deeply regrets these errors.
The SEC also provided guidance on remedial actions. A senior attorney from the SEC’s Denver field office has been appointed to oversee this case going forward.
It also said it would require all executive departments to train staff on “accuracy, integrity, and correcting inaccuracies as soon as they become known.â€
connection: US SEC meets again with BlackRock and Grayscale regarding Bitcoin spot ETF listing application
Details of the statement in question
SEC attorney Michael Welsh said in July that DEBT Box had closed about 33 bank accounts in the past 48 hours, although he cautioned that “we don’t have hard numbers.†This is evidence that DEBT Box is trying to move investors’ funds overseas.
However, DEBT Box refuted this in September. The company submitted documents showing that 13 accounts had been closed by January 2023, stating that no account closures occurred in July, which Mr. Welsh mentioned.
It also points out that the closure was carried out by the bank, not DEBT Box.
In response, the court asked the SEC to explain that the SEC’s false and misleading statements violated Article 11 of the Rules of Civil Procedure.
In this regard, the SEC has argued that it did not intend to mislead the court and that the violation was not sufficient for the court to impose sanctions.
Industry reacts fiercely to Chairman Gensler’s remarks
SEC Chairman Gary Gensler posted a video message to X on the 21st, saying that compliance violations are rampant in the cryptocurrency industry globally.
In response, those involved in cryptocurrencies, including the CEO of Ripple, objected. Cryptocurrency companies such as Coinbase want clear regulations, but some say the SEC has failed to provide them.
connection: Cryptocurrency industry rebels against SEC Chairman Gensler’s warning, Ripple CEO also joins in the criticism
The post US SEC admits mistakes in lawsuit against virtual currency companies and apologizes appeared first on Our Bitcoin News.
