- The SEC filed a brief to dismiss the lawsuit against Debt Box.
- Reportedly, the SEC’s dismissal is to evade facing possible monetary sanctions.
- The filing asked for a dismissal without prejudice, leaving the door open for future lawsuits.
The U.S. Securities and Exchange Commission (SEC) filed a brief in the Debt Box case, revealing that the regulator intends to dismiss the lawsuit against the crypto company.
In a January 30 filing to the U.S. District Court of Utah in the SEC’s case against Debt Box, the SEC determined that dismissing the lawsuit is the “best way to proceed.” The court filing said, “The Commission has determined that the best way to proceed is to dismiss this action without prejudice.”
Fox Business Journalist Eleanor Terrett highlighted that the reason behind the SEC’s dismissal is to avoid facing possible sanctions from the court for misleading statements. The SEC believes that while their attorneys should have been “more forthcoming” with the court, the situation doesn’t require sanctions as an appropriate solution to address those issues.
Recently, the Debt Box defendants filed a reply brief asking the court to punish the regulator for deliberate misdeeds. Nevertheless, the SEC requested the court, if a sanction is necessary, not impose a penalty beyond dismissal without prejudice.
Terret added that by asking the case to be dismissed without prejudice, the SEC is leaving a “door open for the agency to come back and file a new suit against Debt Box in the future.” Terret mentioned that a comment from the judge is expected and anticipated.
Furthermore, Terret thought that a dismissal acceptance by the judge doesn’t equate to the agency escaping “scot-free.” The journalist said that the judge could choose to impose monetary sanctions on the agency for misleading the court.
The Debt Box defendants called for monetary sanctions against the regulatory body, which the SEC disputed, claiming that the defendants are requesting monetary sanctions under Rule 11. The SEC argued, “But Rule 11 prohibits a court acting on its own initiative from ordering payment of a monetary penalty to an opposing party.”
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