SEC Obtains Emergency Relief to Halt Utah-Based Company’s Crypto Asset Fraud Scheme Involving 18 Defendants

The Securities and Exchange Commission (SEC) has announced significant legal actions involving Digital Licensing Inc., also known as “DEBT Box,” a company based in Draper, Utah. The SEC has obtained a temporary asset freeze, a restraining order, and other emergency measures against DEBT Box and its four principals: Jason Anderson, Jacob Anderson, Schad Brannon, and Roydon Nelson, along with 13 additional defendants. This move is in connection with a fraudulent scheme that centered on selling crypto asset securities to numerous U.S. investors, amassing around $50 million and unspecified quantities of Bitcoin and Ether.

The SEC’s complaint, which was unveiled in the U.S. District Court for the District of Utah, outlines an ongoing scheme that commenced in March 2021. The defendants promoted the sale of unregistered securities they referred to as “node licenses.” Through various online videos, social media posts, and investor events, they assured investors that these node licenses would yield various crypto asset tokens through cryptocurrency mining activities. Furthermore, they claimed that the value of these tokens, which DEBT Box mined, would surge due to revenue-generating enterprises across multiple sectors. Allegedly, these assurances were false, as the node licenses were designed to conceal the fact that DEBT Box created the total supply of each token instantly using blockchain code.

Tracy S. Combs, Director of the SEC’s Salt Lake Regional Office, remarked, “Our allegation is that DEBT Box and its leaders provided false information to investors about nearly every critical aspect of their unregistered securities offering, including falsely asserting their involvement in crypto asset mining. This emergency action has been taken to safeguard the victims impacted by the defendants’ unlawful conduct and to prevent further harm.”

The SEC’s complaint goes on to assert that DEBT Box and its principals, as well as defendants James Franklin, Western Oil Exploration Company Inc., and Ryan Bowen, deceived DEBT Box investors about the revenues generated by the businesses supposedly underpinning the token values.

In total, the SEC has charged 18 defendants for their involvement in unregistered securities offerings. Among them, DEBT Box, Jason Anderson, Jacob Anderson, Brannon, Nelson, Franklin, Western Oil, and Bowen face additional charges for violations of the antifraud provisions within federal securities laws. Furthermore, Jason Anderson, Jacob Anderson, Brannon, Nelson, Bowen, Mark Schuler, Benjamin Daniels, Joseph Martinez, Travis Flaherty, Brendon Stangis, Matthew Fritzsche, B & B Investment Group, LLC, and iX Global, LLC have also been charged with acting as unregistered brokers.