ICOBox on SEC’s Crosshairs Over $14.6 Million in Unregistered Offering and Tokens
The US Securities and Exchange Commission (SEC) charged ICOBox Incubator and its founder Nikolay Evdokimov, for allegedly conducting an illegal Offering and selling $14.6 million illegal tokens to around 2,000 investors.
In the complaint, SEC indicates that the ICOS tokens are virtually worthless because ICOBox had failed to register as a broker. Despite lacking authorization, ICOBox went ahead to brokerage an Initial Coin Offering that made over $650 million for clients.
The complaint that was presented to the US District Court in the Central District of California states that:
“Since August 2017, ICOBox and Evdokimov have engaged in both the unregistered offering of securities through a $14.6 million ICOBox token sale, as well as the unregistered broker activities related to securities offered by ICOBox’s clients, exposing thousands of investors to risky investments without providing the necessary information and protections required by the federal securities laws.”
ICOBox, by self-proclamation, is an incubator for blockchain growth and business facilitation, for the companies that want to sell products through ICO crowd-sales.
Evdokimov allegedly assured investors that ICOBox would gain success and the ICOS tokens would be valuable. He also promised to attract, for the investors, more than a hundred investors per month. To date, ICOBox has not seen one token through to completion of the sale.
SEC also accuses ICOBox of neglecting guidelines of the DAO Report, which they were well aware of at the time of ICOS offering. To evade registration, ICOBox instead opted to claim that their tokens have a unique unspecified utility that qualified for exemption. SEC stated:
“By not registering the ICOS offering, the company deprived investors of meaningful information that would be found in a registration statement that investors could use to assess the company’s prospects.”
SEC also complained that ICOBox’s results turned to be far less than what they had promoted to their investors. If found they are found guilty, ICOBox and its founder will face several injunctions as sought by SEC. Ms Layne of the Los Angeles Regional Office said:
“The SEC’s complaint charges ICOBox and Evdokimov with violating the registration requirements of the federal securities laws and seeks injunctive relief, disgorgement with prejudgment interest, and civil money penalties.”
Continued Efforts by the SEC to Secure Crypto Community
This is not the first time SEC has taken legal action against crypto startups operating without proper authorization.
In November 2018, SEC charged Zachary Coburn, the founder of EtherDelta crypto platform, with operating an unregistered national crypto exchange.
On August 2019, SEC settled a case with ICO Research and Rating Provider who failed to disclose that it received payment to tarnish certain digital assets by their competitors. The Russian ICO paid $268,998 in fines.
About The Author
Wayne JonesAm Wayne, a Blockchain enthusiast and expert in crypto trading. Currently, I cover trendy issues on digital currencies.
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