David Schwarz, the Chief Technology Officer (CTO) of Ripple, has expressed disgust over the “shocking behavior” of the US Securities and Exchange Commission (SEC) in a case against crypto company Debt Box. A judge has accused the SEC of “misrepresenting facts” to secure a temporary restraining order, a move that could mar Gary Gensler’s legacy.
The SEC vs. Debt Box judge said the court was “concerned the Commission made materially false and misleading representations that violated Rule 11(b) and undermined the integrity of proceedings.” As a result, the SEC needed to motivate why it should not be subject to sanctions by the court.
Ripple CTO Riled at Lies in Debt Box Case
Earlier this year, the SEC alleged that Debt Box’s relocation to Dubai meant it was fleeing US jurisdiction. The claim was later found to be materially wrong. The SEC now has two weeks to respond to the judge’s request to “show cause” why it should not face a penalty for making false claims.
In July, the agency accused Debt Box of allegedly selling “node licenses” it didn’t register as securities. The SEC alleged the company falsely marketed licenses as tools to enable mining but instead used them to create more crypto with software.
Read more: Top 7 Upcoming ICOs To Watch Out for in 2023
Schwarz, Ripple Labs’ CTO, said the SEC’s obvious attempts to “paralyze several businesses” and misrepresent facts constituted “shocking” behavior. Stuart Alderoty, who is leading Ripple’s defense against SEC allegations that the company sold unregistered securities, said last week the Debt Box controversy was the latest SEC attempt to exalt its opinion above the law.
Read more: Everything You Need To Know About Ripple vs. SEC
Congress Should Subpoena SEC: Deaton
An op-ed last week said the slew of controversies around the SEC’s disregard for law could mar Gensler’s legacy. Gensler also previously ignored a request to comply with accountability rules of the US Congress.
John Deaton, a pro-crypto lawyer, encouraged the House Financial Services Committee to issue the SEC with a subpoena. It would be the first time the government would take such action against the agency, but that shouldn’t be a deterrent, Deaton insisted.
“Have faith in the Courts. You will win and the precedent you establish will blow a huge hole in the barrier protecting the gross overreach of the Administrative State.”
The US House Committee on Financial Services Republicans recently accused Gensler of conspiring with an artificial intelligence (AI) firm to draft new climate disclosure rules. The AI firm would stand to benefit from these rules, implying questionable conduct on Gensler’s part.
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