SEC to shut down Salt Lake Regional Office following DEBT Box sanctions fiasco

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The US Securities and Exchange Commission (SEC) will shut down its Salt Lake Regional Office (SLRO), according to the agency’s announcement on Tuesday. The closure is planned for later this year and will reduce the total number of SEC regional offices from 11 to 10.

The SEC claims the SLRO “has long been the SEC’s smallest regional office,” adding that the closure is attributed to “significant attrition.” The shutdown is part of the SEC’s efforts to improve its budget and organizational efficiency, the agency stated.

As part of the jurisdiction transfer, the Denver office of the SEC will assume jurisdiction over any enforcement matters previously handled by the Salt Lake City office

The decision follows a dismissed lawsuit against DEBT Box, where the SEC was criticized for “bad faith conduct” and ordered to pay $1.8 million in legal fees.

In July last year, the SEC accused DEBT Box of perpetrating an illegal $50 million crypto scheme, alleging that the company had defrauded investors by misrepresenting the nature of its investments

In April, a federal judge rebuked SEC attorneys Michael Welsh and Joseph Watkins for their actions in attempting to seize DEBT Box’s assets under false pretenses. This led to the attorneys tendering their resignations.

Commenting on the SEC’s latest move, Coinbase chief legal officer Paul Grewal said using “attrition” might be an understatement.

“Attrition”— is that what we are calling unprecedented misrepresentations and bad faith warranting unprecedented sanctions by a federal judge? https://t.co/rb581Eb0lD

— paulgrewal.eth (@iampaulgrewal) June 4, 2024

The SEC’s aggressive stance in crypto enforcement has seen actions against prominent firms, but this recent legal defeat and subsequent office closure mark a significant legal setback for the regulator.

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