Haider Jamal

Apr 23, 2024

Drama At The SEC As Two Lawyers Accused Of Cheating In Crypto Case

Two attorneys with the U.S. Securities and Exchange Commission (SEC), Michael Welsh and Joseph Watkins, stepped down following reprimands and criticism by a federal judge for their gross abuse of authority in a notable cryptocurrency case.


SEC In Hot Water

Welsh and Watkins co-founded Digital Licensing Inc., creators of DEBT Box, a cryptocurrency platform. Welsh was the lead attorney in a case against him. Both resigned after an SEC official warned them of termination if they stayed.

The lawsuit against DEBT Box was marred by inaccuracies, false claims, and insufficient evidence. Federal District Court Judge Robert Shelby, overseeing the case, criticized the agency for misconduct in March. The head of SEC enforcement has since apologized for these errors. In July, the SEC accused DEBT Box and its executives of defrauding investors of at least $49 million. 


More Than Meets The Eye

The asset freeze was lifted after Shelby found possible materially false and misleading statements by the SEC. He penalized the agency for gross abuse of authority and ordered payment of some of the legal fees.

Shelby criticized the arguments made by Welsh and the evidence presented by Watkins and his team. Watkins was the lead investigator on the case. For instance, Welsh claimed DEBT Box had closed its bank accounts and moved assets overseas, which the court found to be untrue.

An SEC investigator attributed the error to miscommunication, and Welsh apologized to the court. In December, SEC enforcement chief Gurbir Grewal apologized to the court for the conduct of his department. He appointed new lawyers to the case and mandated training for the enforcement staff.



Top News

Read more latest news

Press Releases

Do Kwon Trial Begins Despite The Founder

1 month ago Mar 26, 2024

The civil fraud trial involving Ter... Read more

Goldman Sachs Clients Look To Get Back

1 month ago Mar 25, 2024

Institutional clients served by the... Read more

New Payment Limit For Crypto Wallets Scrapped

1 month ago Mar 25, 2024

The recent Anti-Money Laundering re... Read more

Bitcoin Undergoes Price Correction As International Economies

1 month ago Mar 24, 2024

A significant portion of the crypto... Read more

Join Our Newsletter

Get the latest trends and updates on our crypto community.