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SEC to Pay $1.8M in Fees After Judge Dismisses Debt Box Case


SEC to Pay $1.8M in Fees After Judge Dismisses Debt Box Case
May, 29, 2024
5 min read
by Coinpaper
SEC to Pay $1.8M in Fees After Judge Dismisses Debt Box Case

A federal judge ordered the SEC to pay about $1.8 million in fees in its case against Debt Box. The case was also dismissed without prejudice. Meanwhile, former FTX executive Ryan Salame was sentenced to 7.5 years for his role in FTX’s illegal activities. In Europe, Binance France underwent ownership changes due to increasing regulatory pressures.

Debt Box Case Dismissed

A federal judge ordered the United States Securities and Exchange Commission (SEC) to pay approximately $1.8 million in attorney and receivership fees related to its civil case against Digital Licensing, operating as Debt Box.

On May 28, Judge Robert Shelby of the U.S. District Court for the District of Utah signed an order that requires the SEC to pay about $1 million for attorney fees and $750,000 for receiver fees. On the same day, the judge also ended up dismissing the case without prejudice.

Things have been quite rocky for the SEC in this case after a March ruling that found the SEC acted in bad faith regarding a temporary restraining order to freeze Debt Box's assets. Debt Box submitted documents that indicated the commission's information was inaccurate, which led to the threat of penalties against the SEC.

The sanctions required the SEC to cover all attorney fees and costs stemming from the improperly entered ex parte relief. Judge Shelby approved all cost requests from the defendants, excluding a $649 fee.

Debt Box celebrated the ruling in a May 28 X post, "This is a significant win for us. It means that the SEC cannot proceed with the case as it stands." In July of 2023, the SEC accused Debt Box of conducting an illegal $50 million crypto scheme. However, the firm's presentation of documents that revealed false statements and misrepresentations by the SEC is being seen in the crypto community as a perfect example of the regulator’s overreach.

Despite this win for crypto, the SEC is still actively involved in lawsuits against several other crypto firms, including Binance, Kraken, Ripple, and Coinbase.

Debt Box

DEBT Box is a decentralized blockchain network that is operated by anonymous software operators. It was founded by a group of forward-thinking entrepreneurs, and DEBT Box aims to take advantage of technology and the expanding cryptocurrency market to help people in managing and offsetting household debt like mortgages, car payments, credit card debts, and student loans.

To ensure the stability of this blockchain ecosystem, DEBT Box projects are underpinned by commodities and assets, including gold, silver, platinum, oil, natural gas, agriculture, real estate, and royalties. This diverse asset support helps to provide a solid foundation for the network.

DEBT Box's commodity projects gain major benefits from this ecosystem through access to financing, technological support, operational assistance, and additional liquidity. This integrated approach not only helps the projects themselves but also contributes to a more resilient and versatile blockchain network, creating a mutually beneficial environment for everyone involved.

FTX Exec Sentenced

Although Debt Box is out of legal hot water, FTX and its former executives are still being scrutinized. A federal judge sentenced former FTX Digital Markets co-CEO Ryan Salame to 7.5 years in prison after his guilty plea to two felony charges.

During a hearing on May 28 in the U.S. District Court for the Southern District of New York, Judge Lewis Kaplan sentenced Salame for conspiracy to operate an unlicensed money-transmitting business and engaging in campaign finance fraud. Salame pleaded guilty to these charges in September of 2023 and had been awaiting sentencing.

U.S. Attorney Damian Williams pointed out Salame's role in advancing the interests of FTX and Alameda Research through unlawful political influence and operating outside legal boundaries, which helped FTX grow. According to Williams, Salame's actions undermined public trust in American elections and the financial system. Now, Salame’s sentencing reflects the consequences of his offenses.

Salame reported FTX's illegal activities to the Securities Commission of the Bahamas on Nov. 9, 2022, just before Sam Bankman-Fried resigned as CEO and the firm filed for bankruptcy. Bankman-Fried was later extradited to the U.S. and convicted of seven felony counts. He ended up receiving a 25-year prison sentence from Judge Kaplan in March.

Prosecutors recommended that Salame serve up to seven years for misusing FTX user funds and fraud related to contributions to his girlfriend Michelle Bond’s congressional campaign. On the other hand, his lawyers argued for an 18-month sentence since he only occupied the lowest rung of the conspiracies and was very unlikely to reoffend.

Salame is the second FTX-related person to be sentenced after Bankman-Fried. Former Alameda CEO Caroline Ellison, former FTX engineering director Nishad Singh, and FTX co-founder Gary Wang all pleaded guilty and testified in Bankman-Fried’s trial. Their sentencing hearings are still pending.

As part of his plea deal, he must pay roughly $6 million in penalties to the U.S. government and $6 million to FTX debtors. He also has to surrender two properties and a business,effectively leaving him with no remaining assets, according to his lawyers.

Ownership Change for Binance France

Meanwhile, Binance France has new shareholders who now own 100% of the company equally, after a directive from the country’s Financial Markets Authority (AMF). This change was prompted by issues between the original beneficial owner, former Binance CEO Changpeng Zhao, and several U.S. regulatory bodies, including the Justice Department, Commodity Futures Trading Commission (CFTC), and the Treasury’s Financial Crimes Enforcement Network.

Zhao has since withdrawn from Binance France after he pleaded guilty to U.S. charges in November and is serving a four-month prison sentence.

Although Binance France did not openly share the names of the new shareholders, the Pappers information service identified them as Lihua He and Yulong Yan. Yan, who is likely referred to as Allan Yan in the Binance white paper, was the first product director and co-founder of Bijie Tech, Zhao's previous company. Exactly who Lihua He is and their previous work history is still a mystery .

Under the Markets in Crypto-Assets (MiCA) regulations, Binance France can passport its license across all 27 European Union member states, as it received AMF approval in May of 2022. This approval came after it was found the exchange was operating illegally in France since 2020 during investigations for Anti-Money Laundering violations before Zhao's U.S. charges.

Binance France has faced a few other challenges, including difficulties securing a banking partner in France after the CFTC's lawsuit in March 2023. The company also saw the departure of executive director Stéphanie Cabossioras in October of 2023. Furthermore, Binance was denied a virtual asset service provider license in the Netherlands in June, and its Belgian operations were closed by regulators the same month.

Read the article at Coinpaper

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SEC to Pay $1.8M in Fees After Judge Dismisses Debt Box Case


SEC to Pay $1.8M in Fees After Judge Dismisses Debt Box Case
May, 29, 2024
5 min read
by Coinpaper
SEC to Pay $1.8M in Fees After Judge Dismisses Debt Box Case

A federal judge ordered the SEC to pay about $1.8 million in fees in its case against Debt Box. The case was also dismissed without prejudice. Meanwhile, former FTX executive Ryan Salame was sentenced to 7.5 years for his role in FTX’s illegal activities. In Europe, Binance France underwent ownership changes due to increasing regulatory pressures.

Debt Box Case Dismissed

A federal judge ordered the United States Securities and Exchange Commission (SEC) to pay approximately $1.8 million in attorney and receivership fees related to its civil case against Digital Licensing, operating as Debt Box.

On May 28, Judge Robert Shelby of the U.S. District Court for the District of Utah signed an order that requires the SEC to pay about $1 million for attorney fees and $750,000 for receiver fees. On the same day, the judge also ended up dismissing the case without prejudice.

Things have been quite rocky for the SEC in this case after a March ruling that found the SEC acted in bad faith regarding a temporary restraining order to freeze Debt Box's assets. Debt Box submitted documents that indicated the commission's information was inaccurate, which led to the threat of penalties against the SEC.

The sanctions required the SEC to cover all attorney fees and costs stemming from the improperly entered ex parte relief. Judge Shelby approved all cost requests from the defendants, excluding a $649 fee.

Debt Box celebrated the ruling in a May 28 X post, "This is a significant win for us. It means that the SEC cannot proceed with the case as it stands." In July of 2023, the SEC accused Debt Box of conducting an illegal $50 million crypto scheme. However, the firm's presentation of documents that revealed false statements and misrepresentations by the SEC is being seen in the crypto community as a perfect example of the regulator’s overreach.

Despite this win for crypto, the SEC is still actively involved in lawsuits against several other crypto firms, including Binance, Kraken, Ripple, and Coinbase.

Debt Box

DEBT Box is a decentralized blockchain network that is operated by anonymous software operators. It was founded by a group of forward-thinking entrepreneurs, and DEBT Box aims to take advantage of technology and the expanding cryptocurrency market to help people in managing and offsetting household debt like mortgages, car payments, credit card debts, and student loans.

To ensure the stability of this blockchain ecosystem, DEBT Box projects are underpinned by commodities and assets, including gold, silver, platinum, oil, natural gas, agriculture, real estate, and royalties. This diverse asset support helps to provide a solid foundation for the network.

DEBT Box's commodity projects gain major benefits from this ecosystem through access to financing, technological support, operational assistance, and additional liquidity. This integrated approach not only helps the projects themselves but also contributes to a more resilient and versatile blockchain network, creating a mutually beneficial environment for everyone involved.

FTX Exec Sentenced

Although Debt Box is out of legal hot water, FTX and its former executives are still being scrutinized. A federal judge sentenced former FTX Digital Markets co-CEO Ryan Salame to 7.5 years in prison after his guilty plea to two felony charges.

During a hearing on May 28 in the U.S. District Court for the Southern District of New York, Judge Lewis Kaplan sentenced Salame for conspiracy to operate an unlicensed money-transmitting business and engaging in campaign finance fraud. Salame pleaded guilty to these charges in September of 2023 and had been awaiting sentencing.

U.S. Attorney Damian Williams pointed out Salame's role in advancing the interests of FTX and Alameda Research through unlawful political influence and operating outside legal boundaries, which helped FTX grow. According to Williams, Salame's actions undermined public trust in American elections and the financial system. Now, Salame’s sentencing reflects the consequences of his offenses.

Salame reported FTX's illegal activities to the Securities Commission of the Bahamas on Nov. 9, 2022, just before Sam Bankman-Fried resigned as CEO and the firm filed for bankruptcy. Bankman-Fried was later extradited to the U.S. and convicted of seven felony counts. He ended up receiving a 25-year prison sentence from Judge Kaplan in March.

Prosecutors recommended that Salame serve up to seven years for misusing FTX user funds and fraud related to contributions to his girlfriend Michelle Bond’s congressional campaign. On the other hand, his lawyers argued for an 18-month sentence since he only occupied the lowest rung of the conspiracies and was very unlikely to reoffend.

Salame is the second FTX-related person to be sentenced after Bankman-Fried. Former Alameda CEO Caroline Ellison, former FTX engineering director Nishad Singh, and FTX co-founder Gary Wang all pleaded guilty and testified in Bankman-Fried’s trial. Their sentencing hearings are still pending.

As part of his plea deal, he must pay roughly $6 million in penalties to the U.S. government and $6 million to FTX debtors. He also has to surrender two properties and a business,effectively leaving him with no remaining assets, according to his lawyers.

Ownership Change for Binance France

Meanwhile, Binance France has new shareholders who now own 100% of the company equally, after a directive from the country’s Financial Markets Authority (AMF). This change was prompted by issues between the original beneficial owner, former Binance CEO Changpeng Zhao, and several U.S. regulatory bodies, including the Justice Department, Commodity Futures Trading Commission (CFTC), and the Treasury’s Financial Crimes Enforcement Network.

Zhao has since withdrawn from Binance France after he pleaded guilty to U.S. charges in November and is serving a four-month prison sentence.

Although Binance France did not openly share the names of the new shareholders, the Pappers information service identified them as Lihua He and Yulong Yan. Yan, who is likely referred to as Allan Yan in the Binance white paper, was the first product director and co-founder of Bijie Tech, Zhao's previous company. Exactly who Lihua He is and their previous work history is still a mystery .

Under the Markets in Crypto-Assets (MiCA) regulations, Binance France can passport its license across all 27 European Union member states, as it received AMF approval in May of 2022. This approval came after it was found the exchange was operating illegally in France since 2020 during investigations for Anti-Money Laundering violations before Zhao's U.S. charges.

Binance France has faced a few other challenges, including difficulties securing a banking partner in France after the CFTC's lawsuit in March 2023. The company also saw the departure of executive director Stéphanie Cabossioras in October of 2023. Furthermore, Binance was denied a virtual asset service provider license in the Netherlands in June, and its Belgian operations were closed by regulators the same month.

Read the article at Coinpaper

Read More

Nigeria Drops Tax Evasion Charges Against Binance Executives

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Nigerian authorities dropped tax evasion charges against two Binance executives, Tigr...
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NYAG completes settlement with Gemini over Earn program, recovers remaining $50 million for impacted users

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The New York Attorney General’s (NYAG) office announced the completion of its settlem...
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