The U.S. Securities and Exchange Commission (SEC) claimed that ICOBox and founder Nikolay Evdokimov violated securities laws with its 2017 token deal and another activity involving initial coin offerings (ICOs).
As indicated by an official statement on September 18, Evdokimov secured $14.6 million by selling “ICOS” tokens to over 2,000 people, promising clients that the tokens would increase in worth once it started trading. In addition, token holders were told they could buy different tokens on the ICOBox stage at a discount utilizing their ICOS tokens.
“According to the complaint, the ICOS tokens are virtually worthless,” the release states.
The complaint itself indicates that “ICOBox and Evdokimov told investors that the offering proceeds would be used to cover the cost of providing ICOBox’s planned services to digital asset startups that could not afford them,” adding:
“Defendants claimed that ICOBox would be successful — and the ICOS tokens valuable — due to the efforts of ICOBox’s management team, who would curate potential digital asset projects and attract ‘100+’ clients per month. As of the date of ICOBox’s offering, ICOBox had yet to support a single token sale to completion.”
Notwithstanding the deal itself, ICOBox encouraged the sale of another $650 million in token sale for “dozens of clients” through its platform, further acting as an unregistered broker, As per the Wednesday’s release.
The organization is searching for Evdokimov and ICOBox to refund investors with interest, suffer injunctive relief and pay civil money penalties.
In an announcement, SEC Los Angeles Regional Office executive Michele Wein Layne stated, “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.”