The Securities and Exchange Commission (SEC) has taken action against Digital Licensing Inc., also known as “DEBT Box,” for an alleged crypto fraud scheme.

The SEC obtained a temporary asset freeze, restraining order, and other emergency relief in response to an elaborate fraudulent scheme that involved selling crypto asset securities to hundreds of investors. The company reportedly raised about $50 million and undisclosed amounts of Bitcoin (BTC) and Ether (ETH), according to an SEC statement.

The agency explicitly named the company’s four principals in the action, Jason Anderson, Jacob Anderson, Schad Brannon, and Roydon Nelson. A total of 13 other unnamed defendants are also included. Overall, 18 defendants have been charged with offering unregistered securities.

Learn how to keep your digital assets safe with this helpful guide: 15 Most Common Crypto Scams To Look Out For

The SEC filed an unsealed complaint in the US District Court for the District of Utah, accusing the defendants of conducting the scheme since March 2021. According to the SEC statement, the group marketed unregistered securities as “node licenses” through online videos, social media, and investor events. 

The accused allegedly claimed the licenses would generate valuable crypto asset tokens through mining. However, The SEC alleges that this was all a deceit.

In fact, DEBT Box had apparently created the tokens’ total supply in an instant. The “mining” of these crypto assets was a complete fabrication.

The complaint claims that DEBT Box and its team misled investors by providing false information about business revenues. This deception was allegedly to increase the value of the tokens.

“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…. We filed this emergency action to protect the victims of the defendants’ unlawful actions and stop further harm,” said Tracy S. Combs, director of the SEC’s Salt Lake Regional Office.

According to the release, the SEC continues to investigate the matter. There is still room for additional charges.

The SEC has been highly vigilant when it comes to securities fraud in recent years. Especially when the alleged securities fall under the umbrella of crypto.

But that doesn’t mean the regulator always gets it right. On July 13, a judge ruled that—contrary to the SEC’s claims—Ripple’s cryptocurrency XRP was not a security when sold to retail investors on exchanges.

The win for Ripple provoked celebration across the industry, as many wondered whether it would bode well for other cases.

The post Utah Crypto Scammers Lied to Investors About ‘Virtually Everything,’ Claims SEC appeared first on BeInCrypto.

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