More bad news about gary gensler. You don't mess with crypto. You're a very bad man, and we all know what happens to bad men... Technology U.S. Judge Warns SEC Over 'False and Misleading' Request in Crypto Case A federal judge threatened to sanction the SEC's lawyers after their "false" arguments prompted a court to impose a temporary restraining order on crypto firm Debt Box. By Elizabeth Napolitano Dec 1, 2023 at 5:06 p.m. CST Updated Dec 1, 2023 at 6:50 p.m. CST A judge has warned lawyers for the Securities and Exchange Commission (SEC) that he may sanction them for allegedly misleading the court. (Chip Somodevilla/Getty Images) 10 Years of Decentralizing the Future May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now A federal judge on Thursday warned Securities and Exchange Commission (SEC) attorneys that he may sanction them for allegedly convincing a court to freeze a crypto firm's assets under "false and misleading" pretenses, a court filing shows. According to an order issued by U.S. District Judge Robert Shelby of the U.S. District Court in Utah, the SEC's attorneys could be sanctioned for making "misleading" arguments about crypto project Debt Box's alleged efforts to transfer its assets and investors' funds overseas, leading a court to freeze the project's bank accounts. The SEC's "misrepresentations… undermined the integrity of the case's proceedings," in addition to causing Debt Box "irreparable harm," Judge Shelby said in an order. Sanctions are penalties a court imposes on individuals who sign statements they know to be false or otherwise violate court procedures, according to Law.com's legal dictionary. In civil law, sanctions are usually imposed in the form of monetary fines, according to Law.com. A federal judge first slapped Debt Box with a temporary restraining order, restricting its access to its assets, in August. However, he later dissolved the order after Debt Box demonstrated it had neither moved funds outside the U.S., nor closed its bank accounts two days before a hearing over the SEC's request to freeze its funds, Debt Box's lawyers said in a filing. The SEC's Utah office did not immediately respond to a request for comment. The SEC first sued Debt Box in July, alleging the company schemed to sell unregistered securities called “node licenses," beginning in 2021. Debt Box told investors the licenses would mine cryptocurrency that would increase in value, but they were actually minting the crypto themselves using computer code, the SEC alleged in its original complaint. STORY CONTINUES BELOW Recommended for you: Crypto for Advisors: Investing in Web3 Brazil to Impose 15% Tax on Crypto Earnings Held on Offshore Exchanges: Report Here's Why GTA VI Probably Won't Have a Crypto Component In Thursday's order, Judge Shelby asked the SEC's attorneys to respond to his findings that their arguments alleging Debt Box had attempted to move its funds overseas lacked context and were not factual. The regulator has two weeks to respond to the inquiry, according to the order. Edited by Bradley Keoun.