SEC to close regional office after judge dismisses DEBT box case

The United States Securities and Exchange Commission (SEC) will close one of its eleven regional offices after a federal judge ordered the regulator to pay roughly $1.8 million in attorney and receivership fees.

In a June 4 notice, the SEC said it would close its Salt Lake Regional Office in 2024—just one of eleven regional offices in the country. The commission said the closure was due to “significant attrition” at the office and planned to shift operations to Denver.

The announcement came roughly a week after Judge Robert Shelby dismissed the SEC’s civil lawsuit against Digital Licensing, the firm doing business as DEBT Box. He also signed off on an order requiring the SEC to pay roughly $1 million for attorney fees and costs and $750,000 for receiver fees and costs.

The SEC filed its lawsuit against DEBT Box in July 2023, alleging the firm perpetrated an illegal $50 million crypto scheme. However, in March, Judge Shelby found the SEC “engaged in bad faith conduct” over a temporary restraining order to freeze DEBT Box’s assets. The judge ordered sanctions against the SEC, requiring the regulator to cover “all attorney fees and costs arising from the improvidently entered ex parte relief.”

Related: US senators call SEC actions in DEBT Box case ‘unconscionable’

Two SEC lawyers — based at the Salt Lake Regional Office — reportedly resigned over the handling of the case. It’s unclear whether their departure may have contributed to the “significant attrition” to which the commission referred. Cointelegraph reached out to DEBT Box but did not receive a response at the time of publication.

“‘Attrition,’” said Coinbase chief legal officer Paul Grewal in a June 4 X post. “Is that what we are calling unprecedented misrepresentations and bad faith warranting unprecedented sanctions by a federal judge?”

The commission has ongoing enforcement actions against several crypto firms, including Coinbase, Binance, Kraken and Ripple. In May, lawyers for Terraform Labs and its co-founder Do Kwon announced that they had reached an in-principle settlement in its case with the SEC.

Magazine: Godzilla vs. Kong: SEC faces fierce battle against crypto’s legal firepower

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