A Utah federal judge took aim at Securities and Exchange Commission lawyers over a “false” request leading to a crypto company’s funds being frozen, threatening potential sanctions.
Judge Robert Shelby said the SEC made “misleading” claims about Debt Box transferring assets abroad. This prompted a temporary restraining order restricting Debt Box’s bank account access.
But Shelby later dissolved the freeze after Debt Box showed it hadn’t moved funds overseas or closed accounts. The judge accused the SEC of undermining case integrity and causing Debt Box irreparable harm.
The scathing order questions the SEC’s factual diligence in targeting crypto firms amid an ongoing crackdown. It also exemplifies judicial skepticism toward regulatory overreach without context.
With crypto laws still unclear, ethical enforcement and oversight is crucial. The rebuke of SEC staff highlights risks from regulatory shortcuts eroding public trust.
