Key takeaways:
- Digital Licensing Inc. has had its assets temporarily frozen by the US SEC after it was charged with running a $50 million fraudulent crypto scheme.
- For marketing unregistered securities offerings, the SEC filed charges against 18 individuals.
The Utah-based cryptocurrency company Digital Licensing Inc. has had its assets temporarily frozen by the United States Securities and Exchange Commission (SEC) after it was charged with running a $50 million fraudulent cryptocurrency scheme.
On August 3, the SEC declared that it had successfully sued Digital Licencing Inc., doing business as “DEBT Box,” and had secured a temporary asset freeze, restraining order, and other emergency remedies.
The enforcement action included 13 more defendants in addition to the firm’s four proprietors, Jason Anderson, his brother Jacob Anderson, Schad Brannon, and Roydon Nelson. Since March 2021, the SEC claims, the company has been selling unregistered securities it refers to as “node licenses.” For marketing unregistered securities offerings, the SEC filed charges against a total of 18 individuals.
The DEBT Box website describes itself as a decentralized, environmentally friendly blockchain “where crypto meets commodities.” It advertises “software mining licenses” for purchase, which must be activated before the user can start mining.
A number of “projects” that claim to be related to numerous industries, including real estate, commodities, agriculture, and technology, guarantee daily rewards.
According to the SEC’s complaint, the company made misleading claims that these “nodes” would produce crypto tokens through mining and that businesses that generate money would increase the token prices, providing investors with enormous profits.
In a statement, the SEC described the node licenses as a ruse designed to hide the fact that the corporation used blockchain technology to create the whole supply. Director of the SEC’s Salt Lake Regional Office, Tracy Combs, stated:
“We allege that DEBT Box and its principals lied to investors about virtually every material aspect of their unregistered offering of securities, including by falsely stating that they were engaged in crypto asset mining,”
The SEC claims that the defendants also misrepresented the earnings of companies that were meant to be driving up the value of the tokens. The SEC is pursuing civil penalties, the restoration of ill-gotten gains, and permanent injunctions against the company.
Additionally, it was claimed in the complaint that the defendants “misappropriated” the money obtained by purchasing opulent homes and cars, traveling lavishly, and “showering themselves and their friends with cash.”
