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SEC freezes assets of crypto mining firm DEBT Box in $50m fraud case

Published 08/04/2023, 09:19 AM
Updated 08/04/2023, 09:30 AM
SEC freezes assets of crypto mining firm DEBT Box in $50m fraud case

Crypto.news - The US Securities and Exchange Commission has frozen the assets of Utah-based crypto mining firm Digital Licensing Inc., alleging a $50 million fraudulent crypto scheme.

On Aug. 3, the SEC announced that it had obtained a temporary asset freeze, along with a restraining order and emergency relief, against the company operating under the name “DEBT Box” and people associated with the company.

The enforcement actions included four principals of the firm, Jason Anderson, his brother Jacob Anderson, Schad Brannon, and Roydon Nelson, as well as 13 other defendants who were allegedly involved in the fraudulent activities.

SEC exposes sham behind ‘node licenses’

According to the SEC, Digital Licensing Inc. has been selling unregistered securities, referred to as “node licenses,” since March 2021.

The company’s website, DEBT Box, claims to be a decentralized and eco-friendly blockchain platform that combines crypto and commodities. It offers “software mining licenses” that purportedly require activation before mining can begin.

The company entices investors with promises of daily rewards tied to various industries such as real estate, commodities, agriculture, and technology.

DEBT Box offering “mining” projects | Source: DEBT Box

Despite claims of transparency, the SEC uncovered that Digital Licensing Inc. had falsely asserted that these “nodes” would generate crypto tokens through mining, leading to substantial gains for investors as revenue-generating businesses supposedly increased token values.

In its complaint, the SEC accuses Digital Licensing Inc. of perpetrating a sham by presenting the node licenses as genuine products while obscuring the fact that the total token supply was artificially created by the company using blockchain code.

“We allege that DEBT Box and its principals lied to investors about virtually every material aspect of their unregistered offering of securities, including by falsely stating that they were engaged in crypto asset mining.”

Tracy Combs, Director of the SEC’s Salt Lake Regional Office.

The SEC’s investigation also revealed that the defendants had allegedly lied about the revenues of businesses tied to increasing token values.

In light of all of these accusations, the SEC is seeking permanent injunctions, the return of “ill-gotten gains,” and civil penalties against Digital Licensing Inc.

This article was originally published on Crypto.news

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