SEC Sues ICOBox, Founder for Masquerading as Broker

The Securities and Exchange Commission (SEC) sued ICOBox and its founder Nikolay Evdokimov, for conducting an illegal Initial Coin Offering token sale for ICOBox’s native tokens on Wednesday. The SEC stated that the company raised almost $14.6 million of “ICOS” tokens to over 2,000 investors, back in 2017.

The complaint filed by the US regulatory body stated that the defendants claimed that the value of the tokens would rise in value and the ICO’s token holders would be able to exchange them at a discount for other cryptocurrencies, available on the platform. The SEC alleged that the ICO’s tokens were nearly worthless and that they had not registered as a broker and yet acted as one by facilitating ICOs that raised more than $650 million for numerous clients.

Michele Wein Layne, Regional Director of the Los Angeles Regional Office, said, “By ignoring the registration requirements of the federal securities laws, ICOBox and Evdokimov exposed investors to investments, which are now virtually worthless, without providing information that is critical to making informed investment decisions.”

The regulatory body charged the company as well as the founder with violating the registration requirements of the federal securities laws, while seeking injunctive relief, civil money penalties and disgorgement with prejudgment interest.

This is not the first time, the SEC has taken steps against an errant ICO. In August, the regulatory body had charged well-known ICO rating company, ICO Rating for failing to disclose payments received from issuers for publicizing their digital asset securities offerings. After being charged, the company agreed to pay $268,998 to settle charges.

At the time, Melissa Hodgman, Associate Director of the SEC’s Enforcement Division, had said, “The securities laws require promoters, including both people and entities, to disclose compensation they receive for touting investments so that potential investors are aware they are viewing a paid promotional item. This requirement applies regardless of whether the securities being touted are issued using traditional certificates or on the blockchain.”

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