SEC admits to misstatement of facts in case against crypto firm Debt BOX
Dec. 22, 2023
By Mike Dalton
On Dec. 22, the U.S. Securities and Exchange Commission (SEC) admitted to making inaccurate statements in an ongoing case against Debt BOX, a cryptocurrency firm accused of significant fraud.
The SEC alleges that Debt BOX defrauded investors of almost $50 million. Though its core claims remain, the SEC admitted today that its legal counsel unknowingly made inaccurate representations during a July 28 hearing that allowed it to obtain a restraining order, asset freeze, and other restrictions against Debt BOX.
The regulator admitted to failings throughout its organization, stating:
“The [SEC] and its attorneys fell short of [expectations] here … Commission attorneys failed to correct that statement when they learned of the inaccuracy. Commission counsel also failed to make clear that certain representations were inferences from the facts known to them rather than directly supported factual assertions.”
The SEC said it “deeply regrets these errors” and promised to prevent similar mistakes. It said that it has assigned senior staff and an experienced attorney to the current matter, adding that it will carry out additional accuracy training.
Gurbir S. Grewal, the SEC’s Director of the Division of Enforcement, admitted to error in a separate filing. He wrote: “I understand that the Division fell short of these standards in this case, and I apologize for that shortfall.”
The SEC pleaded with the court to refrain from applying sanctions, arguing that the circumstances surrounding their errors do not warrant a misconduct penalty. It stated that its staff have not engaged in any bad faith conduct that could support sanctions.
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