SEC filed a lawsuit in the federal court of the Central District of California against ICOBox and its founder Nikolai Evdokimov, accusing them of unregistered sale of tokens for $ 14 million.
According to the SEC, the defendants violated federal securities laws by selling tokens that were unregistered securities and acting as an unregistered broker.
“Since August 2017, ICOBox and Evdokimov participated in an unregistered offer of securities through the sale of tokens for $ 14.6 million, in unregistered brokerage activities related to securities, as well as involving investors in risky investments without providing the necessary information and remedies required by federal laws on securities ”.
The idea behind ICOBox was that in exchange for payments from potential issuers, the company would allow holders of ICOS tokens to exchange them for tokens issued by ICOBox customers. The SEC statement says:
“ICOBox has contributed token sales to less than 100 customers. In addition, the company stopped exchanging ICOS tokens, which rendered them useless. Tokens are now traded, if at all traded, at a price of about $ 2.41, which is about 1/20 of the average price of a token at the time of the offer. ”
However, since August 2017, defendants have contributed to the sale of tokens to more than 30 customers, raising over $ 650 million and earning significant commissions in this process. At least one of these sales is for Paragon Coin, Inc. – was a securities offer matching the Howie test.
This summer, the SEC settled unregistered token sales with the Bitqyck cryptocurrency exchange and the healthcare blockchain company SimplyVital Health.