Two lawyers for the U.S. Securities and Exchange Commission (SEC) have reportedly resigned after a district court sanctioned the agency for "gross abuse" of power and acting in "bad faith" in a cryptocurrency case.
According to an April 22 Bloomberg report, Michael Welsh and Joseph Watkins, the lead lawyers in the case against crypto platform DEBT Box, resigned earlier this month . Sources familiar with the case say the lawyers were warned that they would be fired if they remained.
Both lawyers were relatively new to the agency, as evidenced by their profiles on LinkedIn. Welsh had been a trial attorney at the SEC since December 2022, while Watkins had served as a lawyer in the Executive Department since January 2023.
The pair's resignation follows a court decision by Chief Judge Robert J. Shelby, the federal judge hearing the case in Salt Lake City, Utah. In March, Judge Shelby sanctioned the SEC for false statements and misrepresentations in a case against Digital Licensing Inc. known as DEBT Box.
Judge Shelby stated in her March 18 letter that "the Commission's conduct discussed above constitutes a gross abuse of the authority entrusted to it by Congress and fundamentally undermines the integrity of this proceeding and the judicial process."
In August 2023. The SEC obtained emergency relief to halt the Utah-based company , temporarily freeze its assets and obtain restraining orders against DEBT Box principals in connection with claims of a $50 million crypto fraud.
Judge Shelby went on to say that the evidence presented "had no basis in fact," but was nevertheless presented in a "deliberately false and misleading manner."
Translated with DeepL.com (free version)
