SEC Obtains Judgment Against Ico Incubator and Its Founder for Unregistered Offering and Unregistered Broker Activity
Litigation Release No. 24763 / March 10, 2020
Securities and Exchange Commission v. ICOBox, et al., No. CV-19-8066 (DSF) (C.D. Cal.)
On March 5, 2020, the Honorable Dale S. Fischer of the United States District Court for the Central District of California entered default judgment against ICOBox and its founder Nikolay Evdokimov for conducting an illegal $14.6 million securities offering of ICOBox's digital tokens and for acting as unregistered brokers for other digital asset offerings.
The SEC's complaint, filed on September 18, 2019, alleged that ICOBox raised funds in 2017 to develop a platform for initial coin offerings by selling, in an unregistered offering, roughly $14.6 million of "ICOS" tokens to over 2,000 investors. The complaint further alleged that ICOBox failed to register as a broker but acted as one by facilitating initial coin offerings that raised more than $650 million for dozens of clients.
The court granted 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.
The SEC's investigation was conducted by Brent W. Wilner and was supervised by Victoria A. Levin, Alka N. Patel, and Michele Wein Layne of the Los Angeles Regional Office. The litigation was conducted by Amy J. Longo of the Los Angeles Regional Office.