• Two key attorneys in the DEBT Box lawsuit, resigned after Judge Robert Shelby sanctioned them for "gross abuse of power" in their handling of the case.
  • The head of SEC's Enforcement Division issued an apology acknowledging the agency's failure to meet legal standards.

Cryptocurrency and the United States Securities and Exchange Commission (SEC) don’t share a good bond. And in this bitter relationship, a new event has sparked a buzz in the world.

According to a report, Michael Welsh and Joseph Watkins, leading lawyers in the DEBT Box lawsuit, have resigned after being sanctioned by Judge Robert Shelby for a “gross abuse of power” in seeking a restraining order against the Utah-based crypto company.

Following Shelby’s order, the SEC acknowledged in a court filing that its team did not meet expectations but argued that penalties were unnecessary. The agency’s Enforcement Division head, Gurbir Grewal, also issued a personal apology.

Grewal wrote:

“It is my expectation that all attorneys in the Division accurately present to the courts the evidence in a particular case and the applicable law, at all times avoiding either misrepresentations or misleading representations to tribunals. It is also my expectation that if a Division attorney makes a mistake, it is quickly and appropriately addressed and corrected. I have consistently emphasized these expectations and the importance of maintaining trust and credibility in the work we do. I understand that the Division fell short of these standards in this case, and I apologize for that shortfall.”

Last year in July, the SEC accused DEBT Box and its executives of defrauding investors of at least $49 million. In August, the SEC obtained a temporary asset freeze, a restraining order, and other emergency relief against Digital Licensing Inc., which was operating as “DEBT Box.”

Edited by Harshajit Sarmah