ICOBox, an initial coin offering project (ICO) that raised a whopping $14.6 million from the sale of its native altcoin in 2017, has been dragged to court by the United States Securities and Exchange Commission (SEC) for selling unregistered securities and functioning as a broker without obtaining the relevant licenses, according to a press release on September 18, 2019.
ICOBox in SEC Hot Water
While the crypto winter of 2018 succeeded in killing off several fake ICO projects, the U.S. SEC is leaving no stone unturned in its quest to sanitize the nation’s financial ecosystem by crushing crypto projects that may have flouted its statutes.
According to a statement released by the U.S. financial watchdog, ICOBox, an ICO project that solicited investments from U.S investors earlier in 2017, has been dragged to court for selling unregistered securities and acting as a broker-dealer.
Specifically, the SEC alleges that ICOBox and its founder, Nikolay Evdokimov organized an illegal securities offering that generated $14.6 million used in developing its platform for initial coin offerings.
ICOBox Deceived Investors
The SEC SEC complaint also alleges that he ICOBox team deceived investors into believing that their ICOS tokens would significantly increase in value when trading commences and that investors would be able to exchange ICOS at a discount for other altcoins supported by ICOBox.
However, contrary to the promises of ICOBox and its founders, the value of ICOS token has crashed massively and the digital asset is now worthless to token holders.
Commenting on the matter, Michele Wein Layne, Regional Director of the Los Angeles Regional Office noted that ICOBox and its founders went against existing laws to expose investors to risky investment vehicle without making efforts to enlighten them. Layne declared:
“By ignoring the registration requirements of the federal securities laws, ICOBox and Evdokimov exposed investors to investments, which are now virtually worthless, without providing vital information that would have enabled them to make informed decisions.”
Now, ICOBox and its founders have been ordered to cease operations and the SEC also seeks disgorgement with prejudgement interest and civil money penalties.
Since its launch, ICOBox has helped a good number of blockchain to raise more than $650 million in total from ICOs.
In related news, earlier in June 2019, the SEC sued Kik Interactive Inc, for selling unregistered securities during its hugely successful ICO that raised $100 million in 2017.