- Two attorneys who led the case against DEBT Box have departed from the SEC.
- The court has proven that the Commission made false statements during the proceedings.
- As a result, the regulator’s lawsuit against the company was dismissed.
- Reports have emerged in the media suggesting that the lawyers faced the threat of termination amidst this development.
Following the failure of the US Securities and Exchange Commission (SEC) in the DEBT Box cryptocurrency case, two lawyers have resigned from their positions, according to sources cited by Bloomberg.
The individuals in question are Michael Welsh and Joseph Watkins. They reportedly resigned due to mounting pressure.
Both Welsh and Watkins were responsible for pursuing the case against Digital Licensing Inc., the company behind the DEBT Box project. Threats of termination were directed towards them when the Commission’s claim was ultimately dismissed.
Bloomberg acknowledged that the SEC and the labor union representing these employees declined to comment on the situation.
DEBT Box Case
In July 2023, the SEC accused DEBT Box of engaging in unlicensed securities sales. In August, the regulator successfully obtained a freeze on the company’s assets through court intervention. However, the restriction was later lifted when the company provided evidence that no funds were transferred abroad.
Amidst a series of misleading and questionable allegations, the judge even threatened the SEC with penalties. The regulator acknowledged its mistakes, stating that some statements were merely deductions.
According to Bloomberg, it was Welsh and his team who alleged that DEBT Box had transferred funds outside the United States.
In January 2024, the court dismissed the lawsuit after the Commission failed to substantiate any legal violations committed by the company.
Interestingly, in April 2024, the firm counterclaimed, seeking $1.5 million in compensation for legal expenses.