SEC gets restraining order against firm accused of crypto scheme

The Securities and Exchange Commission obtained a temporary restraining order against a Utah firm doing business as “DEBT Box” after accusing its principals of defrauding investors of at least $49 million in a crypto scheme. 

Brothers Jason and Jacob Anderson, as well as 15 others, raised millions in bitcoin and ether from hundreds of U.S. investors beginning in March 2021 through their company, the SEC said in a statement on Thursday. 

They sold unregistered securities dubbed “node licenses,” which they told investors would generate “crypto asset tokens through crypto mining activity and that revenue-generating businesses in a variety of sectors would drive the value of the various tokens DEBT Box mined,” according to the SEC. 

Investor funds from selling the node software licenses to support underlying businesses were instead used for the defendants’ personal pockets including luxury cars, homes and “lavish” vacations, according to the SEC.

“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,” said Tracy S. Combs, director of the SEC’s Salt Lake Regional Office. “We filed this emergency action to protect the victims of the defendants’ unlawful actions and stop further harm.”

The SEC also said it obtained a temporary asset freeze and other emergency relief.

Unregistered securities

The agency said the defendants sold securities including BLGD, GROW, NATG, XPLR, DLG, ALUM, BEV, BLOX, DRIP, DCM and DEBT. 

The SEC has cracked down on the crypto industry, and in past charges against firms have labeled some cryptocurrencies as securities. Most recently, the agency said Hex was a security after accusing its founder Richard Schueler of selling unregistered securities on Monday.