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Utah mining software firm DEBT Box faces charges over alleged $50M scam

The U.S. Securities and Exchange Commission (SEC) has obtained a restraining order against a Utah-based company accused of orchestrating a $50 million scam.

The watchdog also obtained a temporary asset freeze and other temporary relief against Digital Licensing Inc., an entity based in Draper, Utah, that does business as DEBT Box. It further charged the company’s four principals and 13 other defendants in connection with the digital asset securities scam.

Since March 2021, the company has been selling “node licenses” to U.S. investors, which they claim mine digital tokens. Revenue-generating activities in sectors such as agriculture, real estate, technology, and oil purportedly pump the value of the tokens mined through its node licenses, the company claims in its marketing materials.

“In reality, as alleged, the node licenses were a sham intended to obscure the fact that the total supply of each token was created by DEBT Box instantaneously using code on a blockchain,” the SEC says.

The company’s website claims to build decentralized eco-friendly blockchain technology “where crypto meets commodities.”

Investors must sign up for an account with the firm and pay $145 to activate it before they start mining. They must also purchase node software licenses for prices ranging from $1,000 to $12,000 per license. After this, they can watch their money rolling in and withdraw at any time, the company claims.

“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. We filed this emergency action to protect the victims of the defendants’ unlawful actions and stop further harm,” commented Tracy S. Combs, Director of the SEC’s Regional Office in Salt Lake City.

The SEC’s complaint, filed at the Northern Division in the District of Utah, seeks disgorgement of ill-gotten gains, civil penalties, and permanent injunctive relief.

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