The Securities and Exchange Commission moved to dismiss its lawsuit against crypto firm DEBT Box this week after admitting federal prosecutors made incorrect statements before a Utah judge overseeing the case.
In a court filing Tuesday, the SEC said it had determined that voluntarily dropping the months-long action against DEBT Box was the best path forward. However, the agency can technically refile charges at a later date should it restart legal pursuits against the crypto startup.
Also read: Binance Allows Large Traders To Keep Assets In Independent Banks
“The Commission has determined that the best way to proceed is to dismiss this action without prejudice. Thus, the Commission has authorized the filing of a motion to dismiss this action without prejudice, which will be forthcoming,” reads the filing.
Just last month, Judge Robert Shelby ordered the SEC to explain why sanctions should not be levied on agency lawyers after they falsely alleged DEBT Box shifted funds overseas to escape regulatory jurisdiction.
Judge Shelby slammed SEC attorneys for falling short
Shelby slammed the government attorneys for “falling short” on accuracy and candor requirements.
While avoiding disciplinary measures against its legal team, the dismissal marks a symbolic setback for the powerful securities regulator, often accused of overreach during its blockchain industry crackdown.
Also read: How Many U.S. Senators Now Openly Support Crypto?
The surrendered lawsuit specifically charged DEBT Box with defrauding investors out of $49 million through unregistered crypto asset offerings. However, questions over factual misrepresentations could open paths to challenging other active SEC complaints as well.