Michael Welsh and Joseph Watkins, two attorneys with the Securities and Exchange Commission (SEC), tendered their resignations on April 22 in response to a federal judge’s sanction and harsh criticism of the regulatory body’s handling of a case involving cryptocurrencies.
Stay in the know on crypto by frequently visiting Crypto News Today
At first, the SEC legal team, headed by lawyer Michael Welsh, had persuaded the judge to put DEBT Box’s assets on hold, claiming the company was relocating to Dubai, where U.S. regulations wouldn’t apply.
Amid Controversy Surrounding the DEBT Box Case, SEC Attorneys Resign
Sources with knowledge of the situation claim that Welsh and Watkins resigned after being told by an SEC representative that they would be fired if they continued. The attorneys were spearheading the SEC’s legal action against DEBT Box, a cryptocurrency platform operated by Digital Licensing Inc.
CryptoCaster Quick Check:
The federal district court judge in Salt Lake City, Robert Shelby, claimed that the lawsuit against DEBT Box was plagued by accusations of false statements, misrepresentations, and a lack of evidence. Shelby censured the SEC in March for what he considered to be a “gross abuse” of authority, which prompted the head of enforcement to issue an apology for the agency’s errors.
DEBT Box’s assets were frozen and a receiver was named after the SEC accused the company’s executives of defrauding investors out of at least $50 million in July 2023. But after Shelby found possible false and misleading statements made by the SEC, the asset freeze was lifted. The judge’s decision mandated that the SEC pay a portion of DEBT Box’s legal costs.
Shelby questioned Welsh’s claims as well as the supporting documentation Watkins and his associates offered. Welsh’s false allegation that DEBT Box was closing bank accounts and moving assets abroad was one example that the court brought to light. Welsh apologized to the court after the SEC said that a misunderstanding caused this error.
An unexpected turn was taken in the DEBT Box case. The defendants contested the Securities and Exchange Commission’s (SEC) allegations, claiming that the regulator had falsified information in order to secure a temporary injunction that prevented the crypto platform’s assets from being used.
Judge Robert Shelby asked the SEC to defend its actions in response to the charges made by the defendants. Although the SEC’s attorneys admitted that their strategy was flawed, they pleaded with the judge not to impose formal penalties.
Amid growing criticism, the SEC completely withdrew the lawsuit in January. Nonetheless, Judge Shelby refused to dismiss the case “without prejudice,” preventing the SEC from resubmitting it in the future.
Judge Shelby Criticizes SEC Handling of DEBT Box Case
Judge Shelby ordered the Securities and Exchange Commission (SEC) to “show cause” in December, a court order requiring the agency to provide evidence or justification for its actions. Although the SEC admitted to lacking transparency, it argued that formal penalties were unnecessary.
SEC lawyer Michael Welsh was singled out by Judge Shelby for his part in deceiving the court and attempting to obfuscate the facts.
Welsh acknowledged that his statement from the TRO hearing was untrue, according to him. “He and the Commission carefully changed the language to obscure and continue the misconduct, instead of correcting the misstatement.”
Gurbir Grewal, the chief of SEC enforcement, responded to the court’s scrutiny by expressing regret for the department’s actions and announcing steps to rectify the situation, such as assigning new attorneys and requiring enforcement personnel to undergo training. Later, motions were made to reimburse the SEC for costs incurred during the case, including legal fees, which came to over $1.5 million.
We hope you appreciated this article. Before you move on, I was hoping you would consider taking the step of supporting CryptoCaster’s journalism.
From Elon Musk, Larry Fink(BlackRock) to Jamie Dimon(JP Morgan Chase) a number of billionaire owners have a powerful hold on so much of the hidden agendas’ which eludes the public concerning the paradigm shift juxtaposed by cryptocurrency and web3 emerging technologies. CryptoCaster is different. We have no billionaire owner or shareholders to consider. Our journalistic efforts are produced to serve the public interest in crypto development and institutional disruptions – not profit motives.
And we avoid the trap that befalls much U.S. and global media – the tendency, born of a desire to please all sides, to engage in false equivalence in the name of neutrality and retail consumer protection. While fairness and transparency dictates everything we do, we know there is a right and a wrong position in the fight against fiat global banking interest and monetary reconstruction precipitated by the emerging crypto ecology.
When we report on issues like the FTX, Binance and Ripple crisis, we’re not afraid to name who or what is uncovered. And as a crypto sentinel, we’re able to provide a fresh, outsider perspective on the global monetary disruption – one so often missing from the insular American and European media bubble.
Around the world, readers can access the CryptoCaster’s paywall-free journalism because of our unique reader-supported model. That’s because of people like you. Our readers keep us independent, beholden to no outside influence and accessible to everyone – whether they can afford to pay for news and information, or not.
We thankyou for the on-going support our readers have bestowed monetarily. If you have not considered supporting CryptoCaster, if you can, please consider supporting us just once from $1 or more of Bitcoin (satoshi) or Eth, and better yet, support us every month with a little more. Scroll further down this page to obtain CryptoCaster’s wallet addresses.
Thank you.
Kristin Steinbeck
Editor, CryptoCaster
Please Read Essential Disclaimer Information Here.
© 2024 Crypto Caster provides information. CryptoCaster.world does not provide investment advice. Do your research before taking a market position on the purchase of cryptocurrency and other asset classes. Past performance of any asset is not indicative of future results. All rights reserved.
Contribute to CryptoCaster℠ Via Metamask or favorite wallet. Send Coin/Token to Addresses Provided Below.
Thank you!
BTC – bc1qgdnd752esyl4jv6nhz3ypuzwa6wav9wuzaeg9g
ETH – 0x7D8D76E60bFF59c5295Aa1b39D651f6735D6413D
MATIC – 0x7D8D76E60bFF59c5295Aa1b39D651f6735D6413D
LITECOIN – ltc1qxsgp5fykl0007hnwgl93zr9vngwd2jxwlddvqt
CRYPTOCASTER HEATMAP
