On Tuesday, Chief District Judge Robert J. Shelby of the United States District Court for the District of Utah issued two rulings in the case involving the U.S. Securities and Exchange Commission (SEC) and the crypto firm Digital Licensing Inc., also known as Debt Box.

One ruling mandates the SEC to compensate $1,821,824 in attorney fees and expenses. This penalty was imposed due to the SEC's conduct in obtaining and defending an ex parte temporary restraining order (TRO) and receivership, both of which were based on misrepresentations to the court. The court document states that on March 18:

The court determined that the Commission engaged in bad faith conduct in securing and defending the TRO and imposed a penalty against the Commission, requiring payment of all attorney fees and expenses resulting from the improperly obtained ex parte relief.

Specifically, the SEC is instructed to pay various amounts to different parties, including $8,239 to Calmes & Co. Inc. and Calmfritz Holdings LLC, $19,015 to Matthew D. Fritzsche, $252,316 to iX Global Defendants, $153,365 to the FAIR Project Defendants, $34,260 to the local counsel of the Debt Box Defendants, $565,498 to the lead counsel of the Debt Box Defendants, $42,191 to Brendan J. Stangis, and $746,942 to the Receiver.

‘Today’s Decision Is a Significant Victory’

The second ruling issued by Judge Shelby grants the SEC’s request to dismiss its case against Debt Box and associated individuals and entities without prejudice. This ruling allows the SEC’s new legal team to review the case, conduct further investigations, and decide whether to proceed with a new complaint. The court stipulated that any future related cases must be filed in the same court before the same judge, ensuring continued oversight and addressing concerns about potential legal bias.

Responding to the court rulings, Debt Box posted on social media platform X on Tuesday: “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 through Judge Shelby.” The crypto firm added:

Today’s decision is a significant victory, not only for D.E.B.T. Box but for the entire industry and our dedicated community. It highlights the importance of integrity and fairness in regulatory practices.