Court urges SEC to push for default judgment in action against ICOBox

Maria Nikolova

Failure to file a default judgment motion by January 10, 2020, may result in sanctions, including dismissal for failure to prosecute, Judge Dale S. Fischer warns.

Judge Dale S. Fischer of the California Central District Court has set a deadline for the Securities and Exchange Commission (SEC) to push further with its enforcement action against ICOBox and Nikolay Evdokimov.

Earlier this week, the Judge signed a brief order, noting that default has been entered by the Clerk as to the defendants. However, no motion for default judgment has been filed yet, the Judge noted. The SEC is ordered to file a motion for default judgment on or before January 10, 2020. Failure to file a default judgment motion by that date may result in sanctions, including dismissal for failure to prosecute.

ICOBox, a company claiming to be “Blockchain Growth Promoter and Business Facilitator for companies seeking to sell their products via ICO crowdsales”, and its founder Nikolay Evdokimov are accused of conducting an illegal $14 million securities offering of ICOBox’s digital tokens and of acting as unregistered brokers for other digital asset offerings.

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.

According to the regulator, 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.

The SEC’s complaint charges ICOBox and Evdokimov with violating the registration requirements of the federal securities laws. The regulator seeks injunctive relief, disgorgement with prejudgment interest, and civil money penalties.

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