SEC Slams ICOBox with $16 Million Fine for Securities Violation


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The U.S. Securities and Exchange Commission (SEC) is seeking civil penalties and disgorgement from crypto entrepreneur Nikolay Evdokimov and his company, ICOBox for facilitating the sale of unlicensed securities via ICOs. 

SEC Wants ICOBox to Pay $16 Million Fine

According to FinanceFeeds, the SEC wants the courts to issue a $16 million fine on the ICO hosting platform ICOBox and its founder Nikolay Evdokimov. As previously reported by BTCManager, the Commission filed charges against ICOBox back in September 2019 for operating as an unlicensed broker and selling unregistered securities via ICOs.

Per the SEC’s complaint, ICOBox and Evdokimov exposed investors to risky investments during its $14.6 million token sale event. The Commission is asking to issue a default judgment against the defendants.

Submitting documents to the California Central District Court on Friday (January 10, 2020), the SEC claims that ICOBox and Evdokimov are jointly liable for $14.6 million in disgorgement penalties and prejudgement interest of $1,459,428.99.

Also, Evdokimov is ordered to pay civil penalties in the amount of $189,426. Upon passing of the proposed judgment, the defendants will have 14 days to satisfy the payments ordered by the court.

As an ICO hosting broker, ICOBox has facilitated token sales over $650 million from 30 clients under different broker-dealer arrangements earning significant profits in the process.

Since the bull market of late 2017, the hype surrounding ICOs and other forms of token sale have declined drastically. Currently, ICO fundraising figures are at all all-time low amid plummeting altcoin prices and a significant tightening in government regulations.

SEC Onslaught on Offending ICOs Continues

The SEC’s case against ICOBox is one of many indictments against ICOs running simultaneously. Currently, the Commission is engaged in a legal tussle with Telegram over its $1.7 billion token sale. So far, Telegram has been able to prevent the Commission from obtaining financial documents related to its ICO.

Apart from ICOs, the SEC is also going after companies that used the 2017 bull run and the hype around blockchain to deceive investors. Earlier in January, ex-Longfin CEO Venkata Meenavalli settled his case with the Commission. The SEC has also successfully prosecuted cases against Longfin, obtaining judgments for fines totaling $33 million.

As part of its regulatory focus for 2020, the SEC says crypto oversight will continue to be a priority. Meanwhile, U.S. legislators are looking towards creating clear rules for cryptocurrency governance in the country especially regarding the duties of Federal regulators like the SEC and the Commodity Futures Trading Commission (CFTC).

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