Court Sanctions SEC for 'Gross Abuse of Power' in Debt Box Crypto Case

By: Isha Das

The US Securities and Exchange Commission (SEC) has been ordered to cover the legal fees and costs in the disputed case against crypto firm DEBT Box, according to a recent court filing. The court's action comes as a stern reminder to the regulatory body of the importance of adherence to legal and ethical standards. However, the exact amount to be paid by the SEC is still to be ascertained as DEBT Box and the receivers are given 30 days to file petitions for fees.

Following the sanctions, concerns have been raised that the payments might be drawn from taxpayer money. Paul Grewal, Coinbase's Chief Legal Officer, has suggested that these sanctions will be paid for by 'every US taxpayer'.

In addition, the court has rejected the SEC's earlier motion to dismiss the case, which could have allowed the regulatory body to refile the case. The case continues with the court yet to determine whether the SEC was justified in obtaining a controversial restraining order against Debt Box, who were alleged to be involved in a fraudulent $50 million crypto scheme. The SEC is currently under scrutiny for providing the court with misleading information during the proceedings.

Calling out the SEC's behavior as 'a gross abuse of power', Judge Robert Shelby voiced his criticism of the regulatory organization.