In a shocking turn of events, the United States Securities and Exchange Commission (SEC) is now facing potential sanctions after a federal judge accused the agency of lying to obtain a temporary restraining order against crypto firm Debt Box.
The incident has sparked outrage from legal expert John Deaton, who has been vocal about the SEC’s pattern of misleading courts and questionable legal tactics.
Judge Robert Shelby, presiding over the Debt Box case, issued a scathing rebuke to SEC lawyers, expressing his strong disapproval of their deceptive tactics in the case against Debt Box.
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The judge firmly accused the SEC of intentionally misleading the court to secure the restraining order, which resulted in the freeze of Debt Box’s assets, resulting in significant harm to the company.
John Deaton Reacts
This isn’t the first time the SEC has faced criticism for its misleading behavior. Deaton, who represents over 75 thousand XRP holders in the Ripple-SEC case, pointed out that this incident is just another example of the agency’s disregard for the truth.
Deaton highlighted the SEC’s history of engaging in questionable legal practices, citing previous instances where courts have reprimanded the agency for its misleading behavior. Notably, he mentioned the SEC’s inconsistent arguments in the Ripple case and its failure to respond in good faith to Coinbase’s petition for crypto rulemaking.
“Court orders SEC to show cause why it should not be sanctioned for making false and misleading representations to the Court.” SEC v Debt Box, 11/30/23
ALMOST EVERY SINGLE COURT THAT HAS DEALT WITH THE @SECGov IN THE LAST 3 YEARS HAS CALLED THEM OUT FOR LYING. @PatrickMcHenry… https://t.co/bswgEaz3hB
— John E Deaton (@JohnEDeaton1) December 1, 2023
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Deaton’s remarks emphasize the pressing need for greater accountability within the SEC. He called upon Congress to take action against the agency’s repeated disregard for legal norms and its tendency to mislead courts.
This call for action echoes Ripple’s ongoing efforts to hold the SEC accountable for its overreach. The company has consistently challenged the SEC’s classification of XRP as a security, arguing that it should instead be considered a commodity.
The SEC’s persistent use of misleading tactics and questionable legal practices raises serious concerns about its ability to effectively regulate the crypto industry. Deaton’s plea for accountability and the SEC’s consistent humiliation in the court shed light on the urgent need for transparency and adherence to legal principles within the agency.
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