Cracking Down on Fraud: SEC Freezes Digital Licensing Inc. Assets
In an impactful move against cryptocurrency fraud, the U.S. Securities and Exchange Commission (SEC) has implemented a series of enforcement actions against Digital Licensing Inc. Announced on August 3, these include a temporary asset freeze, a restraining order, and additional emergency relief. The target is a Utah-based crypto mining firm operating under the alias “DEBT Box.”
Unmasking the Players: Four Principals and Thirteen Defendants
The enforcement actions reach beyond the company itself, implicating four principals of the firm—Jason Anderson, Jacob Anderson, Schad Brannon, and Roydon Nelson—as well as 13 other defendants who were allegedly embroiled in the fraudulent activities.
Busting the “Node License” Sham
Central to the SEC’s allegations is the company’s sale of “node licenses” since March 2021. According to the SEC, these are unregistered securities. DEBT Box, as the company is known through its website, describes itself as a decentralized and eco-friendly blockchain platform, one that unites crypto with commodities.
Promising Daily Rewards: An Attractive Bait for Investors
Digital Licensing Inc. has been enticing investors with promises of daily rewards tied to various sectors. These include real estate, commodities, agriculture, and technology. However, the SEC claims that the company’s promises of transparency are a facade. The company had falsely claimed that these “nodes” would mine crypto tokens, thus providing considerable profit for investors.
Behind the Curtain: An Artificially Created Token Supply
Upon further investigation, the SEC’s complaint alleges that Digital Licensing Inc. has been obscuring an essential truth: the total token supply was artificially created by the company using blockchain code. This effectively debunks the company’s claims of legitimacy for the node licenses.
Revealing False Claims About Revenue Generation
The SEC’s investigation did not stop at the token supply. It also brought to light that the defendants had purportedly misled investors about the revenue generation of businesses linked to the increase in token values.
In response to these allegations, the SEC is now seeking permanent injunctions against Digital Licensing Inc. Moreover, it aims to secure the return of the “ill-gotten gains,” and impose civil penalties on the company. This case underscores the ongoing vigilance and determination of regulatory bodies to ensure the protection of investors in the fast-paced and evolving crypto world.