Blockchain News

Crypto Fraud Exposed: SEC Freezes Assets of DEBT Box in $50 Million Scam

DEBT Box: A Deceptive Crypto Scheme

The United States Securities and Exchange Commission (SEC) has taken swift action against Digital Licensing Inc., operating under the name “DEBT Box,” accusing the Utah-based crypto company of orchestrating a massive $50 million fraudulent crypto scheme. On August 3rd, the SEC secured a temporary asset freeze, a restraining order, and other emergency measures against the firm and its fundamental principals, including Jason Anderson, Jacob Anderson, Schad Brannon, and Roydon Nelson, along with 13 other defendants.

DEBT Box claims to offer decentralised and eco-friendly blockchain services, merging crypto with commodities. The firm sold so-called “node licenses,” marketed as software mining licenses requiring activation before mining could commence. Promising daily rewards through diverse projects spanning real estate, commodities, agriculture, and technology, the firm amassed a considerable following of 30,000 on Twitter and appeared to be active until the SEC intervened, causing its native token, DEBT, to plummet by 52%.

Unmasking the Deception

However, the SEC’s complaint revealed a disturbing truth. The firm had been selling unregistered securities, the “node licenses,” since March 2021, which the SEC denounced as a sham to obscure that DEBT Box had created the total supply using blockchain code. False claims were made about the nodes generating crypto tokens through mining and the revenue-generating businesses enhancing token values, luring unsuspecting investors with the promise of massive gains.

Tracy Combs, director of the SEC’s Salt Lake Regional Office, asserted that DEBT Box and its principals had misled investors on almost every critical aspect of their unregistered securities offering, including falsely claiming engagement in crypto asset mining. The defendants went even further by deceiving investors about the revenue potential of the businesses driving token values, adding to the gravity of their fraudulent activities.

Moreover, the SEC has requested permanent injunctions, the return of ill-gotten gains, and civil penalties against DEBT Box. The enforcement action seeks to protect investors and ensure that those responsible for perpetrating this audacious crypto scam face appropriate consequences.

The recent actions taken by the SEC against DEBT Box expose the dangers of fraudulent crypto schemes and the importance of thorough due diligence when investing in the crypto market. It is a stark reminder to investors to be cautious and vigilant, especially when dealing with firms making extravagant claims and promises. As the crypto space continues to evolve, regulatory bodies like the SEC play a crucial role in safeguarding investors and maintaining the market’s integrity.


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