Two lawyers at the SEC have stepped down amid controversies surrounding the legal proceedings against crypto company DEBT Box. Michael Welsh and Joseph Watkins, who were the lead attorneys for the ongoing case, resigned in April, as reported by Bloomberg.

The regulator apparently planned to dismiss them if they didn't resign. Both lawyers, as well as the SEC and a union representative, declined to comment on the matter. Despite their resignations, there have been no updates on their LinkedIn profiles. Welsh and Watkins had been working as SEC trial lawyers for around 18 months.

The handling of the DEBT Box case by Welsh and Watkins sparked significant controversy due to inaccuracies in the information presented in court, which led to the successful acquisition of a temporary restraining order and asset freeze against the company. Subsequent proceedings revealed that the SEC counsel had provided false and misleading statements to justify their actions, including suggesting that Debt Box had closed accounts shortly before a hearing. The SEC acknowledged errors in December 2023 and tried to drop the case in January, but Debt Box challenged the dismissal. In March, Judge Robert Shelby sanctioned the SEC for abusing its power and ordered the agency to cover legal fees.

The resignations of Welsh and Watkins are notable, especially in light of rumors suggesting that SEC chair Gary Gensler might also resign. However, FOX Business reporter Eleanor Terret debunked these rumors, stating that while Gensler could potentially lose his position after the upcoming US elections, he is unlikely to voluntarily resign because he enjoys his role. Additionally, the White House would probably prevent his resignation due to the current challenges in nominating a replacement. Terret also mentioned that SEC commissioner Caroline Crenshaw's term is ending in June, with no indication yet of whether it will be renewed, although the SEC has not commented on the matter.