US District Court Judge Robert Shelby concluded a hearing by asserting that the US Securities and Exchange Commission (SEC) had acted inappropriately towards The Debt Box, also condemning the agency for abusing the judicial process. This pertains to a case brought by the SEC against The Debt Box in July of last year, 2023, alleging that the company was hastily closing its bank accounts and attempting to leave the country.

The court has now mandated the SEC to cover the legal fees incurred by The Debt Box while rejecting its motion to dismiss the charges without prejudice. This latter aspect is significant as it prevents the Commission from re-filing the case with the same charges. It's reported that the agency had intentions to refile the case with better presentation of its arguments.

The Commission has admitted to misrepresenting facts in error, which led to the case, as The Debt Box's assets were frozen under a temporary restraining order. This event has been detailed in an 80-page filing, highlighting how the conduct of the SEC has significantly undermined the integrity of the proceedings and the judicial process.

A case was filed against The Debt Box when the Commission alleged a $50 million fraud through the sale of unregistered securities.

Initially cooperating with the request, The Debt Box later contested the Commission's misrepresentation to obtain a restraining order. The Commission acknowledged its mistake when pressed by the Court to provide evidence for its action.

This case is pivotal for both sides: crypto firms see it as an opportunity to strengthen their stance against the Commission, while The Debt Box can continue operating as usual.

Previously, a group of Republican senators expressed concern to SEC Chair Gary Gensler over the unfolding events, suggesting that trust in the agency was eroding.

The SEC's strategic decisions to obtain the restraining order, such as presenting questionable information despite lawyers being aware of the true facts, have been criticized. Coinbase's Chief Legal Officer, Paul Grewal, highlighted this in a tweet, accusing the Commission of imposing legal fees on them due to their litigation misconduct.

A spokesperson from the SEC stated that they are reviewing the decision and will issue a statement later.

Many crypto enthusiasts are now pointing out that the SEC has also been engaged in bad faith with Ripple for years, while others are calling for an investigation into Gensler himself.