SEC crackdown on ICOs continues with ICObox indictment

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The U.S. Securities and Exchange Commission (SEC) continues with its crackdown on ICOs with the latest lawsuit filed against ICObox and its founder Nikolay Evdokimov. 

Reportedly, the platform is sued for circumventing SEC registration process and acting as an unauthorized broker for raising millions of dollars through ICO token sale.

SEC’s accusations

Wednesday’s press release stated that Evdokimov sold ICO tokens to more than two thousand individuals and raised over fourteen million dollars ($14.6 million) in the ICO sale. Moreover, he affirmed his clients of increase in token value as soon as the trading commences and offered substantial discounts on other tokens in exchange for the ones purchased.

As a result of this allegedly unapproved trading, ICObox is now being accused by the SEC for violating the securities regulations and facilitating initial coin offerings (ICOs). 

The press statement also stipulates that Evdokimov tricked investors into purchasing the tokens by providing them false information regarding the offering proceeds. The investors were promised that the offerings would be used to cover the initial establishment cost of digital currency-related startups, which cannot, otherwise, afford to set up their bases.

In fact, the defendants still vouch for their strategy and the likeliness in succeeding in their efforts to get the token value up. Although ICObox’s management team argues that the firm has been able to hit the hundred-plus client target every month, it is yet to support an entire token sale.

Besides, ICObox has illicitly carried out the sale of another six hundred and fifty million dollars ($650 million) by luring in a dozen clients, thereby acting as an unauthorized broker, SEC states in the Wednesday release.

Crackdown on ICOs continues

Thus, the SEC rubbishes the sale of these ICOS tokens with an outright disregard to the investments. It demands the firm to pay back its investors with interest and cough up for the penalties incurred.

Michele Wein Layne, SEC’s Los Angeles Regional Office director, said in the statement that ICObox has set forth unethical behavior by concealing the details from the investors and not letting them take an informed decision.

Meanwhile, when it comes to curbing unlawful blockchain activities, SEC is coming down harshly by reaching out to ICOs, tracking their sales and the information offered to its investors. Recently, it accused an ICO rating website of allegedly posting paid reviews.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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