A
federal
judge
ruled
that
the
U.S.
Securities
and
Exchange
Commission
must
pay
legal
costs
for
DEBT
Box,
a
Utah-based
crypto
company
the
SEC
brought
a
suit
against,
finding
that
the
regulator
had
committed
a
“gross
abuse
of
power”
in
its
efforts
to
secure
a
temporary
restraining
order.
The
SEC
sued
the
crypto
project
last
year
alleging
fraud,
securing
a
temporary
asset
freeze
and
restraining
order
against
the
company.
According
to
the
SEC,
DEBT
Box
was
telling
customers
it
was
selling
licenses
to
mine
cryptocurrency,
but
was
in
reality
just
creating
tokens
with
code.
DEBT
Box
filed
to
dissolve
the
temporary
restraining
order,
claiming
the
SEC
had
misled
the
court
about
the
company
moving
its
funds
and
closing
its
bank
accounts.
In
an
order
Monday,
Chief
Judge
Robert
Shelby,
from
the
District
of
Utah,
wrote
that
the
SEC’s
attorneys
misled
the
court
both
in
applying
for
a
temporary
restraining
order
as
well
as
afterward,
when
DEBT
Box
filed
to
dissolve
the
order,
noting
at
the
end
that
the
order
is
focused
on
the
TRO
question,
and
not
the
underlying
case.
The
SEC
will
be
required
to
pay
defendants’
and
receivers’
fees
as
part
of
the
court’s
sanctions,
the
judge
wrote.
“Each
piece
of
support
the
Commission
offered
in
seeking
the
TRO
–
and
then
later
reiterated
in
defending
the
TRO
–
proved
to
be
some
combination
of
false,
mischaracterized,
and
misleading,”
the
order
said.
“Further,
the
Commission
not
only
repeated
and
affirmed
its
misrepresentations
in
the
face
of
contrary
evidence,
it
presented
new
falsehoods
to
the
court
in
an
effort
to
subtly
shift
from
its
previous
misrepresentations
without
acknowledging
its
previous
errors.”
An
SEC
spokesperson
said
the
agency
was
“reviewing
the
decision.”
