In a major blow to the Securities and Exchange Commission, the U.S. District Court for the District of Utah dismissed its lawsuit against Debt Box and ordered the SEC to pay approximately $1.8 million in legal fees.

Court dismisses SEC lawsuit against Debt Box
The SEC charged Digital Licensing Inc., also known as Debt Box, with running an illegal $50 million cryptocurrency scheme. The lawsuit, filed in July 2023, alleges that Debt Box’s activities violated securities laws.

Utah District Court Judge Robert Shelby ruled to dismiss the SEC's lawsuit and criticized the agency for freezing the company's assets. The ruling prevents the SEC from continuing the case in its current form.

On Tuesday, he ordered the SEC to pay Debt Box's attorney fees and related legal costs.

On the same day, the judge dismissed the case without conditions at the SEC's request.

Debt Box shared the news with the community and stressed the importance of this economic sanction, calling it “a step towards fairness and transparency.”

SEC vs. Debt Box Case Update
The move comes after a federal judge criticized the SEC’s conduct in a March filing, particularly regarding the agency’s actions in obtaining a temporary restraining order that freezes assets and appoints a custodian to take over Debt Box.

In April, two SEC lawyers leading the case against Debt Box resigned. A Utah judge said the case was “tainted by false statements and misrepresentations.”

In December, the SEC admitted to making inaccurate statements in the case. The agency admitted it had failed to meet expectations of accuracy and candor in court.