A California judge has ruled startup ICOBox must pay $16 million after the firm failed to acknowledge initial legal action from the SEC.
The U.S. Securities and Exchange Commission, or SEC, has ordered that ICO broker ICOBox must pay $16 million after the startup failed to act on previous legal action from the commission.
U.S. District Judge Dale Fischer of California sided with the SEC in a default judgement, after the alleged unregistered broker failed to respond to the commission’s lawsuit against the startup from September 2019, according to a March 6, 2020 statement.
ICOBox allegedly conducted an unregistered token offering, as well as unregistered broker activities. The SEC filed with California courts in January 2020 seeking such a default ruling.
ICOBox allegedly facilitated millions in ICO sales
On Sept. 18, 2019, the SEC announced legal action against ICOBox and creator Nikolay Evdokimov, stating the firm allegedly held an unregistered digital asset offering in 2017, dealing its assets to over 2,000 participants. The startup reportedly touted the assets would gain financial worth.
At the time of its September 2019 action, ICOBox’s tokens had decreased in value, the SEC said. ICOBox allegedly raised approximately $14.6 million during its ICO.
“By ignoring the registration requirements of the federal securities laws, ICOBox and Evdokimov exposed investors to investments, which are now virtually worthless, without providing information that is critical to making informed investment decisions,” Los Angeles Regional Office Regional director Michele Wein Layne said in a statement from the SEC.
The March 6 brief also included that ICOBox reportedly conducted broker dealings for more than 30 other ICOs, raising $650 million in the process.
The firm has not come forward
Founder Evdokimov has not yet addressed the SEC’s legal action, according to the brief. On his LinkedIn profile, Evokimov still lists himself as ICOBox’s vision director, in addition to his status as founder and director for a stablecoin known as SRL.
The SEC tried to contact the founder in January, with no success. “After service of the complaint was effected at ICOBox’s office, the premises was vacated, with several months’ rent left unpaid,” the SEC said in the brief. “Efforts to email Evdokimov’s last known address … garnered no response (though no emails bounced back).”
With a deadline set 14 days from the ruling, the March 6 action states Evdokimov must pay a civil penalty to the tune of $192,768, while ICOBox must pay $16 million.
Cointelegraph reached out to the SEC for additional details, but received no response as of press time. This article will be updated accordingly should a response come in.