The US Securities and Exchange Commission (SEC) has ordered that ICO broker ICOBox must pay $16 million after the startup failed to act on previous legal action from the commission.
On March 6, according to a statement, it has been reported that US District Judge Dale Fischer of California sided with the SEC in a default judgment, after the alleged unregistered broker failed to respond to the commission’s lawsuit against the startup from September 2019.
However, ICOBox allegedly conducted an unregistered token offering, as well as unregistered broker activities. The SEC filed with California courts in January 2020 seeking such a default ruling.
On September 18, 2019, the SEC announced legal action against ICOBox and creator Nikolay Evdokimov, stating that the firm allegedly held an unregistered digital asset offering in 2017, dealing with its assets to over 2,000 participants. The startup reportedly touted the assets would gain financial worth.
The SEC said that at the time of its September 2019 action, ICOBox’s tokens had decreased in value. ICOBox allegedly raised approximately $14.6 million during its ICO.
Michele Wein Layne, the Regional Office Regional Director of Los Angeles, said:
“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.”
Likewise, the March 6 brief also included that ICOBox reportedly conducted broker dealings for more than 30 other ICOs, raising $650 million in the process.
It has been analyzed that according to the brief, founder Evdokimov has not yet addressed the SEC’s legal action. On his LinkedIn profile, Evdokimov still lists himself as ICOBox’s vision director, in addition to his status as founder and director for a stablecoin known as SRL.
However, the SEC tried to contact the founder in January, with no success.
The SEC said in the brief:
“After service of the complaint was effected at ICOBox’s office, the premises was vacated, with several months’ rent left unpaid. Efforts to email Evdokimov’s last known address … garnered no response (though no emails bounced back).”
Thus, with a deadline set 14 days from the ruling, the March 6 action states Evdokimov must pay a civil penalty to the tune of $192,768, while ICOBox must pay $16 million.
Source: law360.com | cointelegraph.com | Image: bitcoinist.com