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Software firm Debt Box is asking a Utah federal judge to deny the United States Securities and Exchange Commission’s (SEC) motion to dismiss a controversial enforcement action against it.&nbsp;
In the Feb 14.&nbsp;<a href="https://www.law360.com/fintech/articles/1797998/debt-box-calls-sec-dismissal-bid-gambit-to-avoid-sanctions" target="_blank" rel="noopener nofollow">filing</a>, Debt Box characterized the SEC’s move as a strategic maneuver to evade possible sanctions and a permanent dismissal due to alleged misconduct.
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 <img src="https://s3.cointelegraph.com/uploads/2024-02/49d44bae-d2da-426e-aed8-e1f1966fcd90.png" alt="" title="">
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 Extract from Debt Box’s filing. Source:&nbsp;U.S. District Court for the District of Utah
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The SEC <a href="https://cointelegraph.com/news/sec-to-dismiss-debt-box-case-amid-sanctions-threat">submitted a motion to dismiss</a> its case against Debt Box on Jan. 30, expressing its intent to assess the evidence in the case and understand the factors that might have led its legal representatives to initially make inaccurate statements to the court.
However, Debt Box argues that the SEC’s readiness to dismiss the case without prejudice is a strategic move to evade sanctions and possibly initiate a revised version of the enforcement action free from misconduct allegations:
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 “The SEC wants to exit this action under its own terms while retaining the option to re-file another enforcement action against the Debt Box defendants and other defendants at some undetermined time in the future, and perhaps in a different forum — as if nothing happened in this case, but something did happen in this case.”
</blockquote>
Related: <a href="https://cointelegraph.com/news/us-senators-sec-actions-debt-box">US senators call SEC actions in Debt Box case ‘unconscionable’</a>
Debt Box claims the SEC’s move to dismiss is an attempt to receive special treatment in federal courts over entities it regulates. It highlights the SEC’s dissatisfaction with promises to restructure teams or offer more ethics training when businesses are accused of misleading investors.
The filing comes after the SEC’s late December 2023&nbsp;<a href="https://cointelegraph.com/news/sec-regrets-errors-crypto-enforcement">acknowledgment of making inaccurate statements</a>&nbsp;to the court earlier in the case. Judge Robert Shelby previously&nbsp;<a href="https://cointelegraph.com/news/sec-faces-sanctions-threat-as-judge-questions-debt-box-case-accuracy">criticized the SEC’s lawyers</a>&nbsp;and directed the agency to clarify “false or misleading” statements that the company sought to relocate assets overseas to evade regulatory jurisdiction.
However, Shelby found that the SEC misrepresented the situation. In response to a court order, the regulator changed its legal representation, committed to internal training and sought a temporary dismissal for an internal review.
Debt Box also requested that the scheduled hearing on March 7 proceed as planned despite the SEC’s request for cancellation.
In the early stages of the case against Debt Box and its promoters, the <a href="https://cointelegraph.com/news/sec-freeze-assets-debt-box-alleging-fraud">SEC secured emergency measures</a>&nbsp;alleging the software firm defrauded investors of at least $50 million by selling unregistered securities in the form of licenses for software that claimed to mine digital assets linked to real-world industries.
The SEC won a temporary restraining <a href="https://cointelegraph.com/news/sec-freeze-assets-debt-box-alleging-fraud">order to freeze Debt Box assets</a> on Aug. 3, 2023, claiming the firm would remove evidence and secretly transfer assets overseas if it was notified the order would be imposed.
Magazine: <a href="https://cointelegraph.com/magazine/deposit-risk-crypto-exchanges-money/">Deposit risk — What do crypto exchanges really do with your money?</a>

Debt Box counters SEC’s bid for dismissal, alleges strategic maneuver

Cointelegraph

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