Judge Orders SEC to Pay Crypto Startup's Legal Fees

A U.S. judge has ordered the SEC to pay $1.8 million to D.E.B.T Box, a crypto service provider, to cover their legal fees after ruling against the agency.

What's the scoop?

• Case Dismissed: The SEC’s case, accusing the crypto company of defrauding investors for at least $49M, was dismissed by Utah District Court Judge Robert Shelby without prejudice, meaning it has potential for a future reopening.
• SEC Sanctions: Deemed to have exercised a “gross abuse of power,” the SEC was sanctioned for making false statements and abusing its authority, with nearly $600K in fees and costs going to D.E.B.T Box and around $747K for a court-appointed receiver, a third party responsible for managing assets during a case.
• Resignations: Two SEC lawyers resigned following the judge’s criticism of the SEC’s conduct in the case.

Bankless Take:

Despite its recent approval of the ETH ETFs, the SEC still has a long legacy of overstepping its power when approaching crypto. With reputational damage now at risk, hopefully, the agency will be pressured to proceed more cautiously. Given the series of “losses” they’ve incurred recently with the ETF approvals, this D.E.B.T Box case outcome, as well as how FIT21 may benefit Coinbase and Consensys’s countersuits against the SEC, it would not be surprising to see the agency quiet down in their assault against the industry, at least for the time being.