Two lawyers from the Securities and Exchange Commission (SEC), Michael Welsh and Joseph Watkins, have resigned following a significant reprimand from a federal judge. The judge criticized the Wall Street regulator for abuse of power concerning legal action against a cryptocurrency platform, Digital Licensing Inc.
Details of the Alleged Misconduct
In July, the SEC filed charges against DEBT Box and its executives, accusing them of defrauding investors out of at least $49 million. Following these charges, the court, led by Judge Shelby, agreed to the SEC’s request to freeze the company’s assets and place the firm into receivership. However, the legitimacy of the SEC’s actions came under severe scrutiny when it was revealed in court that the evidence presented by the SEC might have been misleading.
Judge Shelby’s Ruling
Judge Shelby issued a ruling against the SEC, indicating that the evidence provided by the agency in its pursuit of an emergency asset freeze was “lacking any basis in reality” and seemed “deliberately misleading.” This critique exemplifies concerns surrounding the integrity of the information submitted by the SEC’s lawyers.
Financial Repercussions and Legal Requests
Following these events, attorneys for DEBT Box and other involved parties have moved to seek compensation for the financial burdens incurred due to the SEC’s actions. They have filed motions requesting the SEC to pay more than $1.5 million in legal fees and other costs associated with the case.
In a space where Bitcoin can be controversial to traditional investors, it’s a sight for sore eyes to see Bitcoin and Crypto related businesses treated fairly in our system, although it’s unfortunate that a situation such as this formed in the first place, we’re glad to see that companies within the crypto space are getting the compensation and respect they so deserve.
