SEC freezes assets of DEBT Box, alleging $50M node license ‘sham’
The United States Securities and Exchange Commission has obtained a temporary asset freeze against Utah-based crypto company Digital Licensing Inc, accusing the firm of perpetrating a $50 million fraudulent crypto scheme.
On Aug. 3 the SEC announced it had obtained a temporary asset freeze, restraining order, and other emergency relief against Digital Licensing Inc., which was operating as “DEBT Box.”
The firm’s four principals, Jason Anderson, his brother Jacob Anderson, Schad Brannon, and Roydon Nelsonand, and 13 other defendants were included in the enforcement action.
The SEC has alleged the firm was selling unregistered securities since March 2021, which it called “node licenses.”
On its website, DEBT Box claims to be a decentralized eco-friendly blockchain “where crypto meets commodities.” It claims to sell “software mining licenses” which need to be activated before they begin mining.
Daily rewards are promised via a number of “projects” that appear to be linked to various industries such as real estate, commodities, agriculture, and technology.
The firm has 30,000 X (Twitter) followers and was still active up until Aug. 3. It has a native token called DEBT which has tanked 52% since the SEC action.
In its complaint, the SEC said the firm falsely claimed that these “nodes” would generate crypto tokens through mining and that revenue-generating businesses would drive up the token values, resulting in huge gains for investors.
We obtained a temporary asset freeze, restraining order, and other emergency relief against DEBT Box and its four principals, Jason Anderson, his brother Jacob Anderson, Schad Brannon, and Roydon Nelson in connection with a fraudulent scheme to sell crypto asset securities.
— U.S. Securities and Exchange Commission (@SECGov) August 3, 2023
In a statement, the SEC called the node licenses a “sham” intended to obscure the fact that the total supply was created by the company using blockchain code.
Tracy Combs, director of the SEC’s Salt Lake Regional Office, said:
“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 defendants also allegedly lied about the revenues of businesses supposedly increasing the token values, according to the SEC.
Related: Cryptocurrency versus the SEC: A fight for fair digital investing
The SEC is seeking permanent injunctions, return of ill-gotten gains, and civil penalties against the firm.
Cointelegraph reached out to Digital Licensing Inc. for comment but did not receive an immediate response.
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US senators are in a marathon vote-a-rama over amendments to Donald Trump’s massive tax and spending bill, with one lawmaker bidding to include tax cuts for crypto.
The culture secretary has claimed there is “a problem of leadership” at the BBC, as the controversy over Bob Vylan’s Glastonbury performance deepens.
Lisa Nandy criticised the corporation over its decision not to pull the livestream after the band’s frontman shouted “death, death to the IDF” – referring to the Israel Defence Forces – on Saturday.
A criminal investigation has been launched into the Glastonbury performances of both Bob Vylan and Kneecap after the police reviewed footage.
Ms Nandy condemned the “appalling and unacceptable scenes” at Glastonbury and said the government would not tolerate antisemitism.
She said she had called BBC director-general Tim Davie after the broadcast of Bob Vylan’s set to find out why it had aired, and why the feed had not been cut.
“I expect answers to these questions without delay,” she said.
Culture Secretary Lisa Nandy. Pic: PA
Later, when asked in the Commons about the BBC’s editorial processes and who would be held accountable, Ms Nandy replied: “When you have one editorial failure, it’s something that must be gripped. When you have several, it becomes a problem of leadership.”
Ms Nandy said she had spoken to members of the Jewish community, including attendees at Glastonbury, who said they were concerned by imagery and slogans and ended up creating their own “safe space”.
Mr Davie has been facing calls for his resignation.
Yesterday, drummer Bobbie Vylan released a video statement on Instagram – saying politicians who have spent time criticising the band should be “utterly ashamed” for giving “room” to this over other issues.
The punk rap duo have had their US visas revoked and been dropped by their US representative, United Talent Agency.
He also addressed what was said on stage, saying: “Regardless of how it was said, calling for an end to the slaughter of innocents is never wrong. To civilians of Israel, understand this anger is not directed at you, and don’t let your government persuade you that a call against an army is a call against the people.”
Shortly after it was posted, the video was no longer available to view.
Israel denies targeting civilians in its war in Gaza.
Moglai Bap and Mo Chara of Kneecap perform at Glastonbury. Pic: Reuters
During Kneecap’s set, one member suggested on stage starting a “riot” outside his bandmate’s forthcoming court appearance, before clarifying he meant “support”.
In a statement, Avon and Somerset Police said that after reviewing footage of the performances of Kneecap and Bob Vylan, further enquiries are required and a criminal investigation is now being undertaken.
“A senior detective has been appointed to lead this investigation,” a spokesperson said. “This has been recorded as a public order incident at this time while our enquiries are at an early stage.”
The force said the investigation will be “evidence-led and will closely consider all appropriate legislation, including relating to hate crimes”.
“We have received a large amount of contact in relation to these events from people across the world and recognise the strength of public feeling,” it added. “There is absolutely no place in society for hate.”
Bob Vylan performing on the West Holts Stage. Pic: PA
What happened?
During Bob Vylan’s set, the duo performed in front of a screen that showed several messages, including one that said Israel’s actions in Gaza amount to “genocide”.
Bobby Vylan also led chants of “death to the IDF”.
The set was live streamed by the BBC as part of its Glastonbury coverage, but has not been made available on demand.
Politicians including the prime minister have criticised the performance. Glastonbury organiser Emily Eavis said the chants “crossed a line” and that there was no place at the festival for “antisemitism, hate speech or incitement to violence”.
A BBC spokesperson said the broadcaster respected freedom of expression “but stands firmly against incitement to violence”.
They added: “The antisemitic sentiments expressed by Bob Vylan were utterly unacceptable and have no place on our airwaves…
“The team were dealing with a live situation, but with hindsight we should have pulled the stream during the performance. We regret this did not happen.”
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What’s the Glastonbury controversy?
Media watchdog Ofcom said it was in talks with the BBC and that the broadcaster “clearly has questions to answer” over the stream.
Irish-language rap trio Kneecap were on stage afterwards. Before their appearance at the festival, there had been calls for Glastonbury to remove them from the bill – as rapper Liam Og O hAnnaidh (who performs as Mo Chara) is facing a terror charge, accused of displaying a flag in support of the proscribed group Hezbollah at a gig in London last November.
Glastonbury organisers kept them on the line-up, but the BBC chose not to stream their set live. An edited version was later made available on demand.
On stage, the band led chants of “f*** Keir Starmer”.
O hAnnaidh’s bandmate Naoise O Caireallain (Moglai Bap) said they would “start a riot outside the courts” for O hAnnaidh’s next appearance, before clarifying: “No riots, just love and support, and support for Palestine.”
Hundreds of people turned out in protest for his first court appearance earlier this month.
Read more:
Who are Bob Vylan?
Festival performers criticise political interference
Bob Vylan were set to perform in Chicago, Brooklyn and Philadelphia in the autumn. They are due to perform at Radar Festival in Manchester on Saturday and Boardmasters, a surfing and music festival in Newquay, Cornwall, in August.
Sharing a statement on Instagram after the Glastonbury set, Bobby Vylan said: “Teaching our children to speak up for the change they want and need is the only way that we make this world a better place.
“As we grow older and our fire starts to possibly dim under the suffocation of adult life and all its responsibilities, it is incredibly important that we encourage and inspire future generations to pick up the torch that was passed to us.”
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The war in Gaza started after Hamas militants launched attacks in Israel on 7 October 2023, killing 1,200 people and taking roughly 250 hostages.
More than 860 Israeli soldiers have been killed since the war began, more than 400 of them during the fighting in Gaza.
Israel’s offensive in Gaza has devastated the enclave and killed around 56,500 people, according to the Hamas-run health ministry, which does not differentiate between civilians and combatants, but says more than half of the dead are women and children.
The government has won a long-running legal challenge about its decision to continue allowing the sale of spare parts for F-35 fighter jets to Israel, while suspending other arms licences over concerns about international humanitarian law in Gaza.
But a key part of its case has highlighted mixed messaging about its position on the risk of genocide in Gaza – and intensified calls for ministers to publish their own assessment on the issue.
PM braced for pivotal vote – politics latest
Lawyers acting for the government told judges “the evidence available does not support a finding of genocide” and “the government assessment was that…there was no serious risk of genocide occurring”.
Therefore, they argued, continuing to supply the F-35 components did not put the UK at risk of breaching the Genocide Convention.
This assessment has never been published or justified by ministers in parliament, despite numerous questions on the issue.
Some MPs argue its very existence contrasts with the position repeatedly expressed by ministers in parliament – that the UK is unable to give a view on allegations of genocide in Gaza, because the question is one for the international courts.
For example, just last week Deputy Prime Minister Angela Rayner told PMQs “it is a long-standing principle that genocide is determined by competent international courts and not by governments”.
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Situation in Gaza ‘utterly intolerable’
‘The UK cannot sit on our hands’
Green MP Ellie Chowns said: “The government insists only an international court can judge whether genocide is occurring in Gaza, yet have somehow also concluded there is ‘no serious risk of genocide’ in Gaza – and despite my urging, refuse to publish the risk assessments which lead to this decision.
“Full transparency on these risk assessments should not be optional; it is essential for holding the government to account and stopping further atrocity.
“While Labour tie themselves in knots contradicting each other, families are starving, hospitals lie in ruins, and children are dying.
“The UK cannot sit on our hands waiting for an international court verdict when our legal duty under the Genocide Convention compels us to prevent genocide from occurring, not merely seek justice after the fact.”
‘Why are these assessments being made?’
“This contradiction at the heart of the government’s position is stark,” said Zarah Sultana MP, an outspoken critic of Labour’s approach to the conflict in Gaza, who now sits as an independent after losing the party whip last summer.
“Ministers say it’s not for them to determine genocide, that only international courts can do so. Yet internal ‘genocide assessments’ have clearly been made and used to justify continuing arms exports to Israel.
“If they have no view, why are these assessments being made? And if they do, why refuse to share them with parliament? This Labour government, in opposition, demanded the Tories publish their assessments. Now in office, they’ve refused to do the same.”
Read more:
‘All I see is blood’
‘It felt like earthquakes’
MPs want Ukraine-style scheme for Gazans
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Routes for Palestinians ‘restricted’
Judges at the High Court ultimately ruled the case was over such a “sensitive and political issue” it should be a matter for the government, “which is democratically accountable to parliament and ultimately to the electorate, not the court”.
Dearbhla Minogue, a senior lawyer at the Global Legal Action Network, and a solicitor for Al-Haq, the Palestinian human rights group which brought the case, said: “This should not be interpreted as an endorsement of the government, but rather a restrained approach to the separation of powers.
“The government’s disgraceful assessment that there is no risk of genocide has therefore evaded scrutiny in the courts, and as far as we know it still stands.”
Pics: Reuters
What is the government’s position?
Government lawyers argued the decision not to ban the export of F-35 parts was due to advice from Defence Secretary John Healey, who said a suspension would impact the whole F-35 programme and have a “profound impact on international peace and security”.
The UK supplies F-35 component parts as a member of an international defence programme which produces and maintains the fighter jets.
As a customer of that programme, Israel can order from the pool of spare parts.
‘This washing of hands will no longer work’
Labour MP Richard Burgon said the ruling puts the government under pressure to clarify its position.
“This court ruling is very clear: only the government and parliament can decide if F-35 fighter jet parts – that can end up in Israel – should be sold,” he said.
“So the government can no longer pass the buck: it can stop these exports, or it can be complicit in Israel’s genocide in Gaza.
“On many issues they say it’s not for the government to decide, but it’s one for the international courts. This washing of hands will no longer work.”
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Dozens dead in Gaza after Israeli strikes
Israel has consistently rejected any allegations of genocide.
Prime Minister Benjamin Netanyahu branded a recent UN report on the issue biased and antisemitic.
“Instead of focusing on the crimes against humanity and war crimes committed by the Hamas terrorist organisation… the United Nations once again chooses to attack the state of Israel with false accusations,” he said in a statement.
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‘Gaza disinformation campaign is deliberate’
The UK government has not responded to requests for comment over its contrasting messaging to parliament and the courts over allegations of genocide.
But in response to the judgement, a spokesperson said: “The court has upheld this government’s thorough and lawful decision-making on this matter.
“This shows that the UK operates one of the most robust export control regimes in the world. We will continue to keep our defence export licensing under careful and continual review.
“On day one of this Government, the foreign secretary ordered a review into Israel’s compliance with international humanitarian law (IHL).
“The review concluded that there was a clear risk that UK exports for the IDF (Israel Defence Forces) in the Gaza conflict might be used to commit or facilitate serious violations of IHL.
“In contrast to the last government, we took decisive action, stopping exports to the Israeli Defence Forces that might be used to commit or facilitate serious violations of international humanitarian law in Gaza.”
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