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On 4 June 2024, the US Securities and Exchange Commission (SEC) announced the closing of its regional office in Salt Lake City later this year.
The announcement comes off the back of a rocky few months at the Salt Lake City office. Most notably, in its failed enforcement action against cryptocurrency platform Debt Box. This failure, although not the sole reason for the closure of the office, is noted as a contributing factor.
In August 2023, the Utah-based office was granted a temporary asset freeze and a restraining order in its case against Debt Box. The accusations levied at the company by the SEC accused included defrauding investors of around $49 million. This information was listed in an SEC complaint filed in the US District Court for the District of Utah in July 2023.
🚀 We have some fantastic news to share with our D.E.B.T. Box community today!
The U.S. District Court for the District of Utah has officially dismissed the SEC's case against us without prejudice. This means the case is closed, and any future action by the SEC would have to go… pic.twitter.com/aGiNVxMYbz
— D.E.B.T. (@TheDebtBox) May 28, 2024
The SEC cited “significant attrition” among office staff as the main reason for the closing of the office.
The Salt Lake City outpost is unique as it is the only office with single state enforcement authority within the SEC. The regulator said it plans to move from Utah to its Denver office. Apparently, there are no plans to close any further regional offices.
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Judge Sides With Debt Box, SEC Forced To Apologize
In November 2023, Judge Robert Shelby expressed concerns that lawyers for the SEC in the Salt Lake City office had made materially false and misleading claims in order to obtain the temporary restraining order against Debt Box.
The following month, Gubrir Grewal, the SEC Enforcement Director, apologized in a court filing. It all culminated with the agency filing for a motion to dismiss the case in January 2024.
In March 2024, Judge Shelby sanctioned the agency for bad faith conduct and ordered it to pay the legal fees for Debt Box, at a cost of $1.8 million. In an 80-page court filing, Shelby said the SEC had abused its authority in the case against Debt Box. The case was officially dismissed last week.
Two SEC lawyers on the case, Michael Welsh and Joseph Watkins, resigned in April 2024. According to LinkedIn, Tracy Combs, the Salt Lake City Office’s Director, resigned the following month, in May.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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