Regulation

SEC Zeroes in on ICOBox Activity, Filing Multiple Charges

Updated on October 19, 2019

Laying Charges

It was recently announced that the Securities and Exchange Commission (SEC) has filed multiple charges against ICOBox.

These charges revolve around what the SEC believes was an illegal sale and distribution of digital securities. ICOBox also illegally acted as an unlicensed broker/dealer on a variety of occasions.

ICOBox

ICOBox is a self-titled ‘ICO/STO Service Provider’. The company was launched in 2017, under the watch of founder, Nikolay Evdokimov.

Nikolay Evdokimov is a serial entrepreneur who has played a role in companies such as ‘Cryptonomos’, CatchBitcoin, and more.

2017 Token Sale

While ICOBox was said to be built with the intent to facilitate token events for others, it is also their very own that has landed them in hot water.

Per the SEC, the company sold and distributed tokens known as ‘ICOS’, in 2017. This event saw over $14 million raised, with funds being garnered from thousands of investors.

Part of what made this event a ‘no-no’, are the promises made on the part of ICOBox. Investors of their tokens were promised that token value would rise over time, in addition to providing financial benefits throughout their platform. This promise of increased values, leading to a financial return, is something that cannot be made on tokens not wishing to be deemed securities.

Double-Edged Sword

While the SEC has focused their filings on the ICOBox token event itself, they are not turning a blind eye to other illegal actions undertaken by the company.

Over the past 2 years, the company has actually been successful with various token events, helping their clients raise over $650 million. Unfortunately, this success also exacerbates the issue at hand, as ICOBox illegally operated as a broker/dealer during these events. Essentially, with the manner in which they were operating, the more success they experienced, the deeper in trouble they got.

Commentary

Upon announcing their decision to charge ICOBox, the SEC released a statement, elaborating on their reasoning for doing so. The following is what they had to say on the matter.

Michele Wein Layne, Regional Director of the L.A. Regional Office, stated,

“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.”

SEC

The Securities and Exchange Commission (SEC), is a United States based regulatory body. They are tasked with ensuring fair and transparent financial activity among industry participants.

Opinions of the SEC have become divided within the world of blockchain. This is mainly due to the pseudo-adoption of Hester Peirce or ‘Crypto Mom’.

In Other News

The development discussed here today is not the first time that we have covered the actions of the SEC. Over the past year, as the regulatory body ramps up their look into fraudulent ICOs, we have looked at a few cases, including the following.

Atonomi Slapped with $25 Million Lawsuit

SEC Lays Multiple Charges against EtherDelta Founder