Court orders ICOBox and founder Nikolay Evdokimov to pay over $16m in disgorgement

Maria Nikolova

The California Central District Court has granted the SEC’s motion for default judgment against ICOBox and its founder Nikolay Evdokimov.

Judge Dale S. Fischer of the California Central District Court has issued a judgment in a lawsuit targeting ICOBox and Nikolay Evdokimov. The action was brought by the Securities and Exchange Commission (SEC) which accused the defendants of conducting an illegal $14 million securities offering of ICOBox’s digital tokens and of acting as unregistered brokers for other digital asset offerings.

Earlier this week, Judge Dale S. Fischer granted the SEC’s motion for default judgment against ICOBox and Evdokimov. As FinanceFeeds reported earlier this year, the SEC sought more than $16m in disgorgement from the defendants in this case.

In its judgment, the Court ordered that ICOBox and Evdokimov are jointly and severally liable for disgorgement of $14,600,000, representing ill-gotten gains obtained as a result of the conduct alleged in the SEC’s complaint, plus prejudgment interest thereon in the amount of $1,459,428.99, for a total of $16,059,429.99.

Furthermore, ICOBox and Evdokimov, and their officers, agents, servants, employees, attorneys, subsidiaries and affiliates, and those persons in active concert or participation with any of them, are permanently restrained and enjoined from making use of any means or instruments of transportation or communication in interstate commerce or of the mails to sell security through the use or medium of any prospectus or otherwise.

The defendants are also permanently restrained and enjoined from, directly or indirectly, unless they are registered with the SEC in accordance with Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78o(b), making use of the mails, or any means or instrumentality of interstate commerce to effect any transactions in, or to induce or attempt to induce the purchase or sale of, any security (other than an exempted security or commercial paper, bankers’ acceptances, or commercial bills), in violation of Section 15(a) of the Exchange Act, 15 U.S.C. § 78o(a).

Let’s recall that, according to the SEC’s complaint, 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 regulator alleged that by not registering the ICOS offering, the company deprived investors of meaningful information that would be found in a registration statement that investors could use to assess the company’s prospects. By actively soliciting and attracting investors to ICOBox’s clients’ securities offerings in exchange for transaction-based compensation without registering as or associating with a registered broker-dealer, the defendants are alleged to have engaged in unregistered broker activities that violated the federal securities laws.

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