The US SEC has made an inaccurate statement in the crypto fraud case and also admitted it. Check out the latest reports about this below.
US SEC admits making inaccurate statement
The U.S. Securities and Exchange Commission (SEC) admitted to making an inaccurate statement in an ongoing crypto fraud case after being questioned by a judge.
In July, the regulator obtained a temporary asset freeze, restraining order and other emergency relief against Digital Licensing Inc. This Utah-based company was doing business under the name “DEBT Box.”
According to the SEC, the company and its founders were operating a fraudulent scheme by selling fake “node licenses” to investors. The company promised that these licenses would generate crypto assets through mining. However, the SEC claims that the company raised around $50 million, and also obtained unspecified amounts of Bitcoin (BTC) and Ethereum (ETH).
The Securities and Exchange Commission (SEC) had obtained a temporary restraining order (TRO) and asset freeze against DEBT Box and its founders.
The SEC alleged that they were diverting investor funds to buy luxury items and transfer money overseas.
However, the defendants filed a motion to dissolve the temporary restraining order, stating that the SEC had misrepresented facts in its allegations.
The restraining order was dissolved during a hearing in October. In November, the judge presiding over the case requested an explanation from the SEC regarding the alleged misrepresentations.
In response, the SEC acknowledged that one of its lawyers had made an inaccurate statement during the initial July restraining order hearing.
During a hearing, Michael Welsh, who was representing the SEC, stated that the defendants had closed approximately 33 bank accounts in the 48 hours leading up to the court date.
However, the SEC has now confirmed that Welsh’s statement was based on a miscommunication and that only 24 bank accounts were closed, and none of them were closed in the month of the hearing. The SEC has acknowledged that the balances of several bank accounts owned by some defendants were substantially reduced in July, but not closed.
The SEC also admits to making several mistakes in presenting interpretations and inferences as facts.
The agency takes the judge’s concerns seriously and deeply regrets its errors. It has taken steps to prevent such mistakes from happening again.