A U.S. federal judge has ordered the Securities and Exchange Commission (SEC) to pay approximately $1.8 million in legal fees in its case against Digital Licensing Inc., also known as Debt Box. The judge dismissed the SEC's case against Debt Box without prejudice, allowing for the possibility of the case being reopened in the future.

In an order filed on Tuesday, Utah District Court Judge Robert Shelby ruled that the SEC must cover the attorney fees and relevant legal expenses incurred by Debt Box. “In this Order, the court ensures the final amount of fees requested by Defendants and the Receiver is reasonable,” the filing stated.

Another filing from the same day revealed that the judge dismissed the case without prejudice at the SEC's request. “The Commission argues dismissal without prejudice is appropriate because it will protect investors and the public interest, and will not cause Defendants legal prejudice,” noted the filing.

Debt Box responded to the order with a post on X, stating, “The court has imposed sanctions on the SEC, requiring them to cover the attorney fees and costs that D.E.B.T. Box incurred during this legal battle. This is a significant step towards justice and transparency. This means the case is closed, and any future action by the SEC would have to go through Judge Shelby.”

The SEC initially filed a complaint against Debt Box in July 2023, accusing the company of defrauding investors out of at least $49 million. However, Judge Shelby had previously criticized the SEC's conduct, particularly regarding the agency's actions in obtaining a temporary restraining order, which included an asset freeze and the appointment of a court receiver to take control of the company.

In March, Judge Shelby condemned the SEC's behavior, highlighting issues with false statements and misrepresentations. This criticism led to the resignation of two SEC lawyers who were leading the case against Debt Box in April. The SEC admitted in December that it had made inaccurate statements and acknowledged that it “fell short” of the expectations to be accurate and candid in court.

This ruling marks a significant development in the ongoing legal saga between the SEC and Debt Box, underscoring the importance of transparency and accountability in regulatory actions.