DEBT Box, a provider of blockchain mining software, has been charged with misleading investors about its participation in cryptocurrency mining and its “node licenses.”
The Utah-based cryptocurrency company Digital Licencing Inc. has had its assets temporarily frozen by the United States Securities and Exchange Commission after it was charged with running a $50 million fraudulent cryptocurrency scheme.
On August 3, the SEC declared that it had successfully sued Digital Licencing Inc., doing business as “DEBT Box,” and had secured a temporary asset freeze, restraining order, and other emergency remedies.
The enforcement action included 13 more defendants in addition to the four firm partners, Jason Anderson, his brother Jacob Anderson, Schad Brannon, and Roydon Nelsonand.
Since March 2021, the SEC claims, the company has been selling unregistered securities called “node licenses.”
The screenshot displays DEBT Box’s explainer of how the node license works. Source: DEBT Box
The DEBT Box website describes itself as a decentralized, environmentally friendly blockchain “where crypto meets commodities.” It advertises the sale of “software mining licenses” that must be activated to start mining.
Some “projects” related to numerous industries, including real estate, commodities, agriculture, and technology, guarantee daily rewards.
“Mining” projects presented on DEBT Box. Source: thedebtbox.com
The company has 30,000 followers on X (Twitter) and was still operational as of August 3. Its native token, DEBT, has lost 52% of its value since the SEC action.
According to the SEC’s lawsuit, the company made misleading claims that these “nodes” would produce crypto tokens through mining and that businesses that generate money would increase the token prices, providing investors with enormous profits.
The SEC described the node licenses as a “sham” meant to hide the corporation’s use of blockchain technology to manufacture the whole supply.
Director of the SEC’s Salt Lake Regional Office Tracy Combs stated:
“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.”
The SEC claims that the defendants also misrepresented the earnings of companies meant to be driving up the value of the tokens.
The SEC is pursuing civil penalties, the restoration of ill-gotten gains, and permanent injunctions against the company.
Cointelegraph contacted Digital Licencing Inc. for comment, but there was no immediate response.
