Judge grants SEC another week to explain alleged 'misrepresentations' in Utah crypto case

Quick Take

  • The SEC was granted an additional week to respond to a federal judge in Utah who ordered the regulator to explain apparent “false or misleading” statements.

The Securities and Exchange Commission has another week to tell a federal judge in Utah why it made a series of possibly "false or misleading" statements in its case against a crypto startup called DEBT Box. 

Judge Robert J. Shelby, Chief United States district judge for the District of Utah, granted the regulator's request for the additional time to respond to the court's order. It now has until Dec. 21. 

Shelby last week ordered the SEC to explain statements it made while trying to implement and maintain a temporary restraining order against DEBT Box. The SEC has claimed the company was trying to move assets overseas in order to escape the regulator's jurisdiction, but the judge said last week that some of the evidence cited may have been "materially false and misleading."

Shelby ordered the SEC to explain why sanctions should not be imposed upon its lawyers and laid out several questions for the agency regarding the evidence it used to support its assertions.

SEC says it needs more time

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The SEC said in a Dec. 7 statement to the court that it needed more time to prepare its response. 

"The Commission takes very seriously the concerns expressed by the Court in the Order to Show Cause and has undertaken a process to provide the Court with a thorough response to the Court's questions," lawyers for the regulator wrote.

"As part of that process, a new team of attorneys, including attorneys from the Commission's Office of the General Counsel ("OGC"), has been assigned to review the events that gave rise to the Court's concerns and prepare the response to the Order to Show Cause. To allow the new team sufficient time to review the facts and prepare the response to the Court, the Commission is seeking a brief, seven-day extension of time to submit its response," they continued.


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About Author

Anna is a senior policy reporter at The Block. She has a background in political journalism and covered Russian civil society for a range of news outlets in Moscow, including the award-winning newspaper Novaya Gazeta. Before joining The Block, Anna spent the past five years investigating cryptocurrency policies and adoption around the world at CoinDesk. Anna owns bitcoin and a gift NFT of sentimental value.

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