The SEC bungled a crypto lawsuit. Then came an alleged kidnapping in Dubai—and questions about $400 million of investors’ funds

During this time, however, one of the main defendants—Jason Anderson, the co-founder and co-owner of the company—traveled to Dubai for a business meeting, according to a police report later filed in Utah by his brother and obtained by Fortune. When Anderson tried to leave the country, two of his business partners allegedly kidnapped him and forced him to turn over $400 million, along with control of Debt Box itself, under mental “torture,” according to the brother’s testimony in the report.

The Anderson brothers did not respond to multiple requests for comment.

The case is currently in limbo, as the SEC decides whether it will refile the charges. But new details from the police report, interviews with key stakeholders, and other documents viewed by Fortune reveal that the story of Debt Box is still unfolding, as hundreds of millions of dollars remain in limbo and business partners feud over the future of the project. It’s a story that could only happen in the topsy-turvy world of crypto—and one that reflects the perils of the SEC’s scorched earth campaign against the volatile sector.

The lawsuit

Debt Box launched in 2021, offering crypto users a way to invest in “node software licenses” that would allow them to “mine” different crypto assets tied to real assets such as gold and oil. The SEC sued the company in federal court last July, however, arguing in a sealed complaint that Debt Box had offered unregistered digital assets that were a “sham.” Still, the project proved lucrative, netting the company nearly $50 million from investors.

As part of the charges, the SEC argued the defendants—who included the two Anderson brothers, 11 other business partners, and a handful of related firms—were taking steps to evade law enforcement, including moving operations to the United Arab Emirates. The SEC secured a temporary restraining order and asset freeze from the judge, using an extraordinary process in which defendants are not even notified of the case against them.

The agency’s case began to unravel in December. Upon learning of the seizures, which included closing Debt Box bank accounts, the company’s attorneys argued that the SEC had obtained the secret restraining order without justification. The judge responded by ordering prosecutors to share more evidence.

After SEC enforcement chief Gurbir Grewal admitted the agency had fallen “short,” the judge slapped the agency with financial penalties for its “bad faith” conduct in mid-March—an unprecedented action against a federal agency—and dismissed the case, though in a way that gave the SEC the option to refile the charges at a later date. The disastrous lawsuit soon became a rallying cry for Gensler’s outspoken critics in the crypto industry and across Congress, with the two lawyers leading the case later stepping down after being told they would be terminated, according to Bloomberg.

It turns out, however, that the SEC’s fears the Debt Box executives were poised to flee the country with investors’ assets may have been warranted.

The alleged kidnapping

In early June, according to the police report obtained by Fortune, an officer in Draper, Utah was dispatched to investigate the reported abduction of Jason Anderson. He interviewed the victim’s brother, Jacob, who said that Jason had gone to Dubai for a business meeting on March 1. When he tried to leave the country, his passport was flagged and he was taken to a back room by airport staff.

Then, according to the brother, he was driven four hours away and placed in a hotel room that was locked from the outside. Two of Anderson’s business partners, Schad Brannon and Roydon Nelson, then allegedly spent two weeks “mentally torturing” him (the report offers no further details) until he agreed to sign away Debt Box and nearly $400 million, and attest that he owed “people” in Dubai another $90 million. Anderson only managed to get a message to his brother through an internet-enabled T.V. remote and, without a passport, was unable to leave the country.

Anderson’s extraordinary story, as detailed in the report, contains some notable holes. For one, the police officer states that the FBI field office in Salt Lake City advised him that agents in Dubai were already aware of the situation. According to the FBI, Dubai police had already visited Jason Anderson at the hotel, where there was no indication of kidnapping. The U.S. embassy in Dubai was also aware of the situation and had advised Anderson on how to procure a new passport—though the FBI also confirmed there was an active criminal case in Dubai against Anderson preventing him from leaving the country.

Jason Anderson has also continued to appear in YouTube interviews dated in late June—three months after the alleged kidnapping—where he lays out his plans to relaunch Debt Box, which lays further doubts that he is being held against his will in Dubai.

The U.S. Attorney’s office in Utah and the U.S. embassy in Dubai did not respond to a request for comment from Fortune. An attorney representing Brannon and Nelson told Fortune that his clients were not aware of a police report made by Jacob Anderson and denied any allegations of kidnapping. Brannon and Nelson both hold high-ranking positions at Debt Box, with Brannon serving as president and Nelson holding several titles, including director, reflecting an ongoing business dispute between the firm’s top brass.

According to another business partner, who spoke with Fortune on the condition of anonymity to discuss an ongoing legal situation, Jacob Anderson continues to insist that his brother is kidnapped and money is frozen—a continued point of contention among the web of defendants. Jacob Anderson also contacted the U.S. embassy in Abu Dhabi with similar details, including that his brother was set to meet members of the “Royal Family,” according to an email viewed by Fortune.

With the SEC off the Debt Box case following the judge’s rebuke, at least for now, the saga appears to reinforce the worst fears endemic to the Wild West sector—and this time with no sheriff. A spokesperson for the agency declined to comment.

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