This month, SEC attorneys Michael Welsh and Joseph Watkins stepped down from their roles following a federal court ruling that penalized the Securities and Exchange Commission in a digital currency dispute with DEBT Box, also known as Digital Licensing Inc.
In simpler terms, according to Judge Robert Shelby’s ruling, the Securities and Exchange Commission (SEC) provided incorrect information, concealed essential facts, and failed to present sufficient proof for their claim of a $49 million digital asset scam.
According to a Bloomberg report on April 22, the lead attorneys in the DEBT Box case were informed by SEC officials that they would be let go if they chose to remain.
SEC on The Backfoot Again
Judge Shelby criticized the SEC’s actions, lifted the asset freeze for DEBT Box, and required the SEC to cover some of DEBT Box’s legal costs as a penalty. Furthermore, the judge found issue with the arguments presented by lawyer Welsh and the evidence brought forth by investigator Watkins.
In one situation, Welsh informed the court that DEBT Box was shutting down bank accounts and moving assets abroad. However, the court discovered this wasn’t true. DEBT Box was among several crypto businesses targeted by SEC lawsuits last summer for suspected fraud involving the unauthorized sale of approximately $50 million in securities to investors.
The federal regulatory body has experienced another disappointing turn of events, having recently lost some notable cryptocurrency court cases. Moreover, they are currently dealing with multiple ongoing cases involving companies like Coinbase and Ripple.
“Gary G hanging on by a thread these days,” commented BlockWorks founder Jason Yanowitz.
Brad Garlinghouse, CEO of Ripple, made a statement saying it seems fitting that his company submits its rebuttal on the very day that two SEC attorneys step down following allegations of misconduct in the Debt Box case.
After Gensler leaves, the US will be left to deal with the aftermath of the agency’s failed policies.
It’s fitting that we submit our response today, following the recent resignations of two SEC lawyers involved in the Debt Box case due to their misconduct.
After Gensler leaves, the US will be left to deal with the aftermath of the agency’s failed policies.
— Brad Garlinghouse (@bgarlinghouse) April 23, 2024
“Rotten cultures start at the top,” commented popular trader and investor, “DCinvestor.”
More Dirty Laundry
On April 23rd, Jimmy Ragosa, a product manager at ConsenSys, announced that he was among the lawyers who recently resigned from the Securities and Exchange Commission (SEC).
He began working with us in the year 2023 and took the role of presiding over the SEC conferences with those looking to issue ETH ETFs.
“It was my responsibility to put my fingers in my ears and shout loudly whenever they inquired about making their application conform.”
I am one of the SEC lawyers that resigned today.
I joined in 2023 and was in charge of leading the SEC meetings with ETH ETF issuers.
I was responsible for putting my fingers in my ears and shouting loudly whenever they inquired about making their app conform to the requirements.
— Jrag.eth (@JimmyRagosa) April 22, 2024
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2024-04-23 09:32