The U.S. Securities and Exchange Commission (SEC) has decided to abandon its lawsuit against Debt Box, a crypto company that was accused of defrauding investors of millions. This surprising move comes after the SEC admitted to presenting misleading information in court, which has significantly undermined the agency's case and credibility.
SEC Requests Dismissal of Lawsuit
The lawsuit was initially filed against Digital Licensing Inc., also known as Debt Box, alleging that the company defrauded investors of at least $49 million. The SEC claimed that Debt Box offered "node licenses" for mining cryptocurrencies that were never actually mined. This action was part of the SEC's broader crackdown on cryptocurrency firms, as Chair Gary Gensler has consistently asserted that most cryptocurrencies are securities.
However, during the course of the case, the SEC's attorneys admitted that they had failed to meet the court's expectations for accuracy and candor. U.S. District Court Judge Robert Shelby in Utah criticized the SEC lawyers, demanding explanations for what he deemed as "false or misleading" statements.
Judge Shelby's Show Cause Order
In response to the SEC's misleading statements, Judge Shelby issued a "show cause order," requiring the SEC to provide a valid reason or explanation for its actions. The SEC had previously claimed that Debt Box was attempting to transfer assets overseas to evade U.S. jurisdiction, a claim that was found to be misrepresented by Judge Shelby.
The SEC filed a statement on Jan. 30, acknowledging that its attorneys should have been more forthcoming with the court. However, the agency argued that sanctions were unnecessary and expressed its intent to dismiss the lawsuit without prejudice, allowing for the possibility of refiling the case in the future.
Questions Raised by the SEC's Decision
The SEC's decision to seek dismissal without prejudice has raised concerns in the legal and financial sectors, particularly considering the agency's aggressive stance on cryptocurrency regulation. Debt Box's legal team strongly criticized the SEC's actions, stating that the agency got the case "badly wrong" and should not be allowed to perpetuate a false narrative to avoid dismissal.
Despite admitting to inaccuracies and moving to dismiss the case, the SEC has refrained from commenting further beyond its public filings.
What could be the reason behind the SEC's inability to pursue this lawsuit? Share your thoughts and opinions in the comments section below.
Frequently Asked Questions
Is buying gold a good way to save money for retirement?
Although gold investment may not seem appealing at first glance due to the high average global gold consumption, it's worth considering.
Physical bullion bar is the best way to invest in precious metals. However, there are many other ways to invest in gold. It's best to thoroughly research all options before you make a decision.
For example, purchasing shares of companies that extract gold or mining equipment might be a better option if you aren't looking for a safe place to store your wealth. If you require cash flow, gold stocks can work well.
You can also invest your money in exchange-traded fund (ETFs), which give you exposure to the gold price by holding securities related to gold. These ETFs often include stocks of gold miners, precious metals refiners, and commodity trading companies.
What precious metal is best for investing?
This question depends on how risky you are willing to take, and what return you want. While gold is considered a safe investment option, it can also be a risky choice. If you are looking for quick profits, gold might not be the right investment. If patience and time are your priorities, silver is the best investment.
If you don’t desire to become rich quickly, gold may be your best option. Silver might be a better investment option if steady returns are desired over a long period of time.
What are the pros and cons of a gold IRA?
An Individual Retirement Plan (IRA) has a major advantage over regular savings accounts. It doesn't tax any interest earned. An IRA is a great option for those who want to save money, but don't want tax on any interest earned. However, there are also disadvantages to this type of investment.
You could lose all of your accumulated money if you take out too much from your IRA. The IRS may prohibit you from withdrawing funds from your IRA before you are 59 1/2 years of age. If you do decide to withdraw funds from your IRA, you'll likely need to pay a penalty fee.
A disadvantage to managing your IRA is the fact that fees must be paid. Many banks charge between 0.5%-2.0% per year. Other providers charge monthly management fees ranging from $10 to $50.
Insurance will be required if you would like to keep your cash out of banks. Most insurers require you to own a minimum amount of gold before making a claim. Insurance that covers losses upto $500,000.
If you choose to go with a gold IRA, you'll need to determine how much gold you want to use. Some providers limit the number of ounces of gold that you can own. Some providers allow you to choose your weight.
Also, you will need to decide if you want to buy physical gold futures contracts or physical gold. Physical gold is more expensive than gold futures contracts. Futures contracts offer flexibility for buying gold. You can set up futures contracts with a fixed expiration date.
You will also have to decide which type of insurance coverage is best for you. The standard policy does NOT include theft protection and loss due to fire or flood. The policy does not cover natural disasters. If you live near a high-risk region, you might want to consider additional coverage.
Additional to your insurance, you will need to consider how much it costs to store your gold. Storage costs will not be covered by insurance. For safekeeping, banks typically charge $25-40 per month.
Before you can open a gold IRA you need to contact a qualified Custodian. A custodian is responsible for keeping track of your investments. They also ensure that you adhere to federal regulations. Custodians are not allowed to sell your assets. They must instead keep them for as long as you ask.
Once you've decided which type of IRA best suits your needs, you'll need to fill out paperwork specifying your goals. Your plan should include information about the investments you want to make, such as stocks, bonds, mutual funds, or real estate. Also, you should specify how much each month you plan to invest.
You will need to fill out the forms and send them to your chosen provider together with a check for small deposits. After reviewing your application, the company will send you a confirmation mail.
Consider consulting a financial advisor when opening a golden IRA. Financial planners have extensive knowledge in investing and can help determine the best type of IRA to suit your needs. They can help you find cheaper insurance options to lower your costs.
How do you withdraw from an IRA that holds precious metals?
First, decide if it is possible to withdraw funds from an IRA. Then make sure you have enough cash to cover any fees or penalties that may come with withdrawing funds from your retirement plan.
A taxable brokerage account is a better option than an IRA if you are prepared to pay a penalty for early withdrawals. If you decide to go with this option, you will need to take into account the taxes due on the amount you withdraw.
Next, calculate how much money your IRA will allow you to withdraw. This calculation depends on several factors, including the age when you withdraw the money, how long you've owned the account, and whether you intend to continue contributing to your retirement plan.
Once you know what percentage of your total savings you'd like to convert into cash, you'll need to determine which type of IRA you want to use. Traditional IRAs permit you to withdraw your funds tax-free once you turn 59 1/2. Roth IRAs have income taxes upfront, but you can access the earnings later on without paying additional taxes.
Once the calculations have been completed, it's time to open a brokerage accounts. Brokers often offer promotional offers and signup bonuses to encourage people into opening accounts. To avoid unnecessary fees, however, try opening an account using a debit card rather than a credit card.
You will need a safe place to store your coins when you are ready to withdraw from your precious metal IRA. While some storage facilities accept bullion bars and others require that you purchase individual coins, others will allow you to store your coins in their own safe. Before you choose one, weigh the pros and cons.
Bullion bars are easier to store than individual coins. You will need to count each coin individually. However, you can easily track the value of individual coins by storing them in separate containers.
Some people like to keep their coins in vaults. Others prefer to store them in a safe deposit box. You can still enjoy the benefits of bullion for many years, regardless of which method you choose.
How to Open a Precious Metal IRA
It is important to decide if you would like an Individual Retirement Account (IRA). Once you have decided to open an Individual Retirement Account (IRA), you will need to complete Form 806. For you to determine the type and eligibility for which IRA, you need Form 5204. This form should be filled within 60 calendar days of opening the account. Once you have completed this form, it is possible to begin investing. You may also choose to contribute directly from your paycheck using payroll deduction.
To get a Roth IRA, complete Form 8903. Otherwise, it will be the same process as an ordinary IRA.
To be eligible for a precious metals IRA, you will need to meet certain requirements. The IRS states that you must be at least 18 and have earned income. Your annual earnings cannot exceed $110,000 ($220,000 if you are married and file jointly) for any tax year. Additionally, you must make regular contributions. These rules apply whether you're contributing through an employer or directly from your paychecks.
You can use a precious-metals IRA to purchase gold, silver and palladium. However, you can't purchase physical bullion. You won't have the ability to trade stocks or bonds.
You can also use your precious metallics IRA to invest in companies that deal with precious metals. Some IRA providers offer this option.
An IRA is a great way to invest in precious metals. However, there are two important drawbacks. First, they aren't as liquid than stocks and bonds. It is therefore harder to sell them when required. They also don't pay dividends, like stocks and bonds. Therefore, you will lose money over time and not gain it.
Which precious metals are best to invest in retirement?
The best precious metal investments are gold and silver. They are both easy to trade and have been around for years. They are a great way to diversify your portfolio.
Gold: This is the oldest form of currency that man has ever known. It's stable and safe. This makes it a good option to preserve wealth in uncertain times.
Silver: The popularity of silver has always been a concern for investors. It's an ideal choice for those who prefer to avoid volatility. Silver, unlike gold, tends not to go down but up.
Platinium is another precious metal that is becoming increasingly popular. It's durable and resists corrosion, just like gold and silver. It is however more expensive than its counterparts.
Rhodium: The catalytic converters use Rhodium. It is also used in jewelry-making. It is also very affordable in comparison to other types.
Palladium: Palladium is similar to platinum, but it's less rare. It is also cheaper. Investors looking to add precious and rare metals to their portfolios love it for these reasons.
How much tax is gold subject to in an IRA
The tax on the sale of gold is based on its fair market value when sold. Gold is not subject to tax when it's purchased. It's not considered income. If you sell it later, you'll have a taxable gain if the price goes up.
As collateral for loans, gold is possible. When you borrow against your assets, lenders try to find the highest return possible. This often means selling gold. The lender might not do this. They may keep it. Or they might decide to resell it themselves. You lose potential profits in either case.
If you plan on using your gold as collateral, then you shouldn't lend against it. You should leave it alone if you don't intend to lend against it.
Statistics
- If you take distributions before hitting 59.5, you'll owe a 10% penalty on the amount withdrawn. (lendedu.com)
- This is a 15% margin that has shown no stable direction of growth but fluctuates seemingly at random. (smartasset.com)
- Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
External Links
irs.gov
cftc.gov
investopedia.com
finance.yahoo.com
How To
Investing gold vs. stocks
Gold investing as an investment vehicle can seem extremely risky these days. This is because many people believe that gold investment is no longer profitable. This belief comes from the fact most people see gold prices falling due to the global economy. They think that they would lose money if they invested in gold. However, investing in gold can still provide significant benefits. Let's take a look at some of the benefits.
One of the oldest forms known of currency is gold. Its use can be traced back to thousands of years ago. It was used all around the world as a reserve of value. It is still used as a payment method by South Africa and other countries.
The first point to consider when deciding whether or not you should invest in gold is what price you want to pay per gram. If you're interested in buying gold bullion, it is crucial that you decide how much per gram. You can always ask a local jeweler what the current market rate is if you don't have it.
Noting that gold prices have fallen in recent years, it is worth noting that the cost to produce gold has gone up. So while the price of gold has declined, production costs haven't changed.
It is important to keep in mind the amount you plan to purchase of gold when you're weighing whether or not it is worth your time. For example, if you only intend to purchase enough to cover your wedding rings, it probably makes sense to hold off on buying any gold. But, if your goal is to make long-term investments in gold, this might be worth considering. It is possible to make a profit by selling your gold at higher prices than when you purchased it.
We hope this article has given you an improved understanding of gold investment tools. We recommend you do your research before making any final decisions. Only after you have done this can you make an informed choice.
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By: David Sencil
Title: The SEC Drops Lawsuit Against Crypto Firm Debt Box Due to Inaccuracies in Court
Sourced From: news.bitcoin.com/sec-moves-to-dismiss-lawsuit-against-crypto-company-debt-box-citing-inaccuracies-in-court/
Published Date: Wed, 31 Jan 2024 22:30:33 +0000
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