SEC seeks more than $16m in disgorgement from ICOBox over illegal digital tokens offering

Maria Nikolova

The regulator is pushing for a default judgment against ICOBox and its founder Nikolay Evdokimov.

The United States Securities and Exchange Commission (SEC) is seeking more than $16 million in disgorgement plus civil penalties in a case targeting ICOBox and Nikolay Evdokimov. This becomes clear from the latest filings with the California Central District Court.

In line with an earlier Court order, on January 9, 2020, the SEC submitted a set of documents, including a motion for default judgment against ICOBox and Nikolay Evdokimov. 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 proposed default judgment, 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. The defendants will have to pay $16,059,429.99 to the SEC within 14 days after entry of the judgment.

Evdokimov is ordered to pay a civil penalty in the amount of $189,426.

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 alleges 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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