The US Securities and Exchange Commission (SEC) has accused the Russian ICOBox crypto start-up and its founder Nikolai Evdokimov of violating the law on the issue of securities. In 2017, the project sold $14 million tokens.
SEC blames ICOBox and Evdokimov
According to the SEC, ICOBox held an ICOICO
(Initial Coin Offerings) is an acronym, which means a primary currency offer. Details in 2017, during which it sold its tokens for $14.6 million. 2000 investors participated in it. The project promised that over time, tokens will increase in price, and investors will be able to exchange them for other platform coins at a discount.
But it turned out that the tokens "are worth nothing." In addition, ICOBox did not register an ICO, as required by the law on the issue of securities. Another project provided brokerage services for other crypto start-ups that raised $650 million through the ICOBox platform. ICOBox did not receive the appropriate licenses, which means it acted illegally.
"Having ignored the requirements of federal laws on the issue of securities, ICOBox and Evdokimov lured investors into investments that are literally worthless. However, they did not provide them with the information necessary to make an informed and informed decision," says Michele Wein Layne, Director of the SEC Los Angeles Regional Office.
Interesting in the section: ICO and its main characteristics
- SEC will seek an injunction against ICOBox, as well as fines and damages to affected investors
- According to SEC rules, if a crypto-project during an ICO promises investors that its tokens will increase in price in the future, such crowdfunding is subject to the law on the issue of securities. Therefore, the project must register the issue with the SEC and follow the rest of the requirements of this law, in particular, the startup is obliged to inform investors about potential risks.