ICOBox: SEC Obtains Default Judgement on $14.6 Million Illegal Securities Offering, Allegedly Failed to Register as Broker While Facilitating $650 Million in ICOs

The Securities and Exchange Commission (SEC) has received a default judgment against ICOBox and founder Nikolay Evdokimov for conducting an illegal $14.6 million securities offering. In a release, the SEC said that Judge Dale S. Fischer of the United States District Court for the Central District of California on March 5, 2020.

ICOBox described itself as a “Blockchain Growth Promoter and Business Facilitator for companies seeking to sell their products via ICO crowdsales.”

As was previously reported, ICOBox was the target of an enforcement action raised funds in an initial coin offering (ICO) as Evdokimov conducted an illegal $14 million securities offering of ICOBox’s digital tokens and for acting as unregistered brokers for other digital asset offerings. Additionally, ICOBox allegedly failed to register as a broker but acted as one by facilitating ICOs that raised more than $650 million for about 30 different clients. ICOBox charged the client success fees starting at 1.5% of the amount raised.

Former SEC attorney Philip Moustakis told Crowdfund Insider it was a smart case for the SEC to bring and a “somewhat irresistible case for SEC staff.” Issuers whose ICOs were facilitated or marketed by ICOBox may need to take remedial steps.

The court has granted a default judgment for the SEC on all charges.

The court found that the defendants illegally offered and sold ICOS tokens, which the court concluded were securities subject to the registration requirements of the federal securities laws.

The court also found that the defendants acted as unregistered brokers.

The court permanently enjoined ICOBox and Evdokimov from violating the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and the broker registration provisions of Section 15(a) of the Securities Exchange Act of 1934, and ordered them to pay disgorgement and prejudgment interest totaling $16,059,428.99.

The court also ordered Evdokimov to pay a civil penalty of $192,768.

 


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