The United States Securities and Exchange Commission (SEC) has alleged that ICOBox and its Founder Nikolay Evdokimov conducted an illegal securities offering and acted as unregistered brokers, according to a press release from 18 September.
As per the announcement, ICOBox and Evdokimov were able to raise around $14 million through the sell of their “ICOS” token in 2017, which was bought by more than 2,000 investors. The unsuspecting investors were promised that the value of the token will increase once it began trading, and that eventually they could use it to buy other tokens from the ICOBox platform, at a discount.
Another promise that ICOBox and Evdokimov gave their investors was that their ICO proceeds would go towards covering “ICOBox’s planned services to digital asset startups that could not afford them”, but the SEC complaint states that “ICOBox had yet to support a single token sale to completion”. Michaele Wein Layne, the director of SEC’s 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 SEC press release also states that the company acted as an unregistered broker, by facilitating the sale of tokens from “dozens of clients”, which were able to raise another $650 million. The regulatory agency is now charging ICOBox and Evdokimov for violating federal securities laws, and wishes for them to refund investors with interest, pay civil money penalties and suffer injunctive relief.