SEC Gets A Temporary Asset Freeze Order Against Digital Licensing
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The US Securities and Exchange Commission (SEC) has secured a temporary asset freeze order against Digital Licensing Inc, which operates as DEBT Box. The commission has frozen the assets belonging to this firm amid allegations of cryptocurrency fraud amounting to $50 million. The seizure comes when the SEC has been cracking down against the cryptocurrency industry.
SEC obtains temporary freeze order against a crypto firm
The four principals of Digital Licensing, Jason Anderson, Jacob Anderson, Schad Brannon, and Roydon Nelson, alongside 13 other defendants, have been served with restraining orders and other forms of emergency relief to the plaintiffs.
The SEC claims that the cryptocurrency firm in question allegedly sold crypto assets to investors, which have the attributes of unregistered securities. The commission said that selling these unregistered securities generated $50 million for the company. The SEC has also said that Digital Licensing sold an unknown number of Bitcoin and Ether to clients.
The SEC said that the defendants had been trading unregistered securities, known as node licenses, since March 2021. The defendants also promoted this fraudulent scheme using online videos, social media platforms, and investor events.
The company promised investors access to a wide range of crypto asset tokens by participating in crypto mining activities. It also said that the revenue derived from other sectors would help propel the value of the company’s own token, DEBT Box.
According to the SEC, the node licenses promised by the company were a sham and the company had illegally created a token supply for each DEBT Box token using codes built on the blockchain. The SEC also said that DEBT Box, alongside its principals and three defendants, promoted falsified revenues to investors to prop up the value of tokens.
The Director of the SEC for the Salt Lake Regional Office, Tracy Combs, noted that the company misled investors about offering unregistered securities. The director also said that the enforcement action taken against the company sought to protect the unlawful actions taken by the defendants.
“We allege that DEBT Box and its principals lied to investors about virtually every material aspect of their unregistered offering of securities, including by falsely stating that they were engaged in crypto asset mining. We filed this emergency action to protect the victims of the defendants’ unlawful actions and stop further harm,” Combs said.
Following this enforcement action, the US regulator is seeking permanent injunctive relief. The regulator also advocates for the company to return the gains they allegedly made illegally. The company might also face civil penalties.
SEC cracks down on the crypto market
The enforcement action comes when the SEC has been cracking down against the cryptocurrency market. The regulator filed charges against Binance and Coinbase, claiming that the two giant exchanges offer unregistered securities.
The SEC classified some of the largest cryptocurrency projects, such as Cardano and Solana, as securities, in a move that led to Robinhood delisting these assets amid fear of regulatory scrutiny.
