The U.S. Securities and Exchange Commission is suing token sales platform ICOBox and its founder Nikolay Evdokimov for selling security tokens without registration in 2017 and acting as an unregistered broker.
According to a press release issued by the SEC, ICOBox raised funds in 2017 to develop a platform for conducting ICOs by selling about $14.6 million “ICOS” tokens to over 2,000 investors via an unregistered offering.
Regional Director of the Los Angeles Regional Office Wein Layne revealed that the SEC is charging ICOBox and Evdokimov with violating the registration requirements of federal securities laws and “seeks injunctive relief, disgorgement with prejudgment interest, and civil money penalties."
“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,” explained Layne.
In accordance with federal securities laws, token sales have to be registered, and they were not in this case according to the suit. Moreover, by acting as an unregistered broker the founder violated another federal law and failed to deliver on the promise that the tokens which he was actively promoting would increase in value upon trading. Evdokimov has additionally been charged for raising “more than $650 million for dozens of clients” without the appropriate registrations.