Federal Judge Orders SEC to Pay $1.8M in Fees for Debt Box Case

A federal judge has mandated that the United States Securities and Exchange Commission (SEC) pay around $1.8 million in attorney and receivership fees associated with its civil lawsuit against Digital Licensing, trading as Debt Box. In a filing on May 28 in the U.S. District Court for the District of Utah, Judge Robert Shelby approved an order directing the SEC to cover approximately $1 million for attorney fees and costs and $750,000 for receiver fees and costs. The order coincided with the case's dismissal without prejudice. The judge referenced a previous court ruling in March that criticized the SEC for its conduct related to a temporary restraining order freezing Debt Box's assets. Debt Box argued that the SEC's information was inaccurate, leading to potential sanctions. As a result, the SEC was instructed to pay all attorney fees and costs related to the restraining order. Judge Shelby deemed most costs requested by the defendants as appropriate except for a $649 fee. This outcome was viewed as a significant victory by Debt Box, preventing the SEC from continuing the case in its current form. The SEC had filed a lawsuit in July 2023 accusing Debt Box of operating an illegal $50 million crypto scheme. The company presented evidence suggesting the SEC had made false statements in its attempt to obtain the restraining order, drawing criticism for regulatory overreach in the crypto community. The SEC's legal battles with crypto firms like Binance, Kraken, Ripple, and Coinbase have prompted calls from U.S. lawmakers for regulatory clarity on digital assets through legislation such as the Financial Innovation and Technology for the 21st Century Act.