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The United States Securities Exchange Commission is seeking a default judgment and $16 million in penalties from token sale platform ICOBox.
The United States Securities Exchange Commission (SEC) is seeking a default judgement against token sale platform ICOBox and its founder Nikolay Evdokimov.
Documents filed with the Central District Court of California on Jan. 9 order the defendants to pay over $16 million in disgorgement to the agency within 14 days of the judgementâs entry.Â
In a complaint filed on Sept. 18, 2019, the SEC had sued ICOBox and Evdokimov for operating an unregistered securities offering of roughly $14.6 million worth of digital assets in 2017, and operating as an unregistered securities broker.
According to yesterdayâs proposed judgment, the SECâs disgorgement penalty is calculated on the basis of $14.6 million in the firmâs ill-gotten gains plus prejudgement interest of just over $1.4 million. Evdokimov is personally ordered to pay a civil penalty of $189,426.
The SECâs complaint against ICOBox
The SECâs complaint in September alleged that ICOBox and Evdokimov facilitated the token sales of over 30 clients, who collectively raised over $650 million from investors. For its own operations, ICOBox purportedly raised $14.6 million in its own âICOSâ tokens from over 2,000 investors in the U.S. and worldwide.
ICOBox ostensibly did so in full knowledge of the SECâs classification of certain digital tokens as securities offerings in the agencyâs DAO Report of July 2017, having publicly discussed the reportâs significance in an interview with Reuters as well as communications with investors.
ICOBox and its founder nonetheless failed to register their token sale platform or qualify its operations for any exemption from registration, instead attempting to claim that ICOS tokens were not securities or that they warranted an exemption due to âan unspecified utility.â
At the time of the September complaint, ICOBoxâs operations were ostensibly still ongoing and the firm had expanded the scope of its services to support security token sales (STOs), thereby continuing to flout registration requirements under federal securities laws.Â
The agency in 2020
Earlier this week, the SECâs Office of Compliance Inspections and Examinations, identified new financial technologies including digital assets among its major concerns in the coming fiscal year.
In an interview Cointelegraph in Dec. 2019, SEC Commissioner Hester Peirce â a.ka. âCrypto momâ â advocated for a more flexible regulatory approach to crypto offerings, proposing that:
âThe biggest thing the crypto community needs is a way to get from a securities offering to a utility token offering that is not covered by securities laws, or is not covered by the full panoply of the securities laws.â
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