The United States Securities and Exchange Commission (SEC) has imposed a freeze on the assets of Digital Licensing Inc., a Utah-based cryptocurrency firm, over allegations of a $50 million fraudulent crypto scheme.

The company, also known as “DEBT Box,” along with its four key personnel and 13 other defendants, are facing urgent legal action initiated by the SEC.

The alleged fraudulent scheme involved the sale of unregistered crypto asset securities, known as “node licenses,” to a multitude of US investors, amassing approximately $50 million. The scheme, which started in March 2021, was promoted through hundreds of online videos and social media posts, claiming that these node licenses would generate various crypto tokens through mining activities.

DEBT Box, which claims to operate as a decentralized, eco-friendly blockchain, promised investors that businesses across multiple sectors would increase the value of the tokens mined, leading to substantial profits. However, the SEC has highlighted inaccuracies in these claims.

The SEC’s intervention includes a temporary asset freeze, a restraining order, and other emergency relief measures. The complaint lodged against DEBT Box and its associates accuses them of involvement in unregistered securities offerings and violating the anti-fraud provisions of federal securities laws. The SEC is seeking permanent injunctions, the return of unlawfully obtained gains, and the imposition of civil penalties against the firm. The investigation is being overseen by members of both the Salt Lake Regional Office and SEC Headquarters.