SEC Charges 18 Utah Defendants in $50M Crypto Fraud Scheme

The SEC announced Thursday it had obtained a temporary asset freeze and a restraining order against an alleged fraudulent scheme based in Utah to sell crypto to hundreds of U.S. investors that raised approximately $50 million.

The SEC charged Draper, Utah-based DEBT Box, as well as the company’s four principals and 13 other defendants, with operating a scheme that began in March 2021 to sell unregistered securities called “node licenses.” Defendants told investors that the licenses would mine cryptocurrency that would increase in value, when in reality, defendants were creating the crypto instantaneously using code on a blockchain, according to the SEC.

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