- Federal judge slams SEC, orders $1.75 million payout over “bad faith” in Debt Box case.
- Debt Box prevails as SEC’s fraud accusations crumble in court.
- Is this the beginning of the end for SEC Chair Gensler’s aggressive crypto crackdown?
In a glaring disapproval of the Securities and Exchange Commission (SEC)’s actions, US District Court Judge Robert J. Shelby has ordered the agency to pay $1.75 million in the Debt Box case to cover legal fees and other costs incurred as a result of the agency’s litigation.
As noted in a post, Paul Grewal, the chief legal officer at Coinbase, detailed how the judge ordered the SEC to “pay attorneys’ fees of over $1 million and receivership fees of about $750,000.”
Judge Shelby asserted that the Commission “engaged in bad faith conduct in obtaining and defending the TRO and imposed a sanction against the Commission of all attorney fees and costs arising from the improperly entered ex parte relief.”
James Murphy, also known as MetaLawMan, commented on the judge’s ruling, stating that the “Debt Box Debacle will, for all time, be the indelible legacy of the “leadership” of Gary Gensler,” the Chair of the SEC.
Debt Box was initially sued by the SEC over allegations of a $50 million fraud scheme, with the agency claiming the firm had moved the money overseas to conceal it. However, the court proceedings revealed that the money was moved within the US, not internationally.
As a result, Judge Shelby concluded that the litigation against Debt Box was a “gross abuse of the power entrusted to it by Congress” and that it “substantially undermined the integrity of these proceedings.”
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