U.S. Securities and Exchange Commission building in Washington, D.C. Jan. 5, 2019.SEC Sues ICO Incubator Over Unregistered Token Offering
The agency claims that ICOBox—the self-described "first and the biggest new generation Blockchain Growth Promoter and Business Facilitator for companies seeking to sell their products via ICO/STO crowdsales"—acted as a broker without registering with the agency and should have registered its own "ICOS" tokens as securities.
September 18, 2019 at 06:51 PM
3 minute read
The U.S. Securities and Exchange Commission has sued a cryptocurrency incubator, claiming it ran afoul of the federal securities laws by failing to register its own $14.6 million initial coin offering and by acting as an unregistered broker for other ICOs.
The agency filed suit against ICOBox and its founder Nikolay Evdokimov in U.S. District Court for the Central District of California on Wednesday claiming that ICOBox should have registered its 2017 offering of roughly $14.6 million worth of "ICOS" tokens to more 2,000 investors. The agency further alleges that ICOBox failed to register as a broker as it helped facilitate about 35 ICOs that raised more than $650 million for its clients.
ICOBox, which describes itself as the "first and the biggest new generation Blockchain Growth Promoter and Business Facilitator for companies seeking to sell their products via ICO/STO crowdsales" on its website, did not immediately respond for a request for comment Wednesday. Defense counsel had yet to make an appearance for the company or Evdokimov on the case docket at the time of publication. The SEC, which often provides information about defense counsel upon filing charges, indicated that the company has no current representation.
According to the agency, ICOBox forecasted that it would help launch roughly 800 ICOs per year and touted that people who bought its own "ICOS" tokens would be able to swap them to buy into ICOs it was helping to launch on a deferred fee basis at a discount rate. According to the SEC, ICOBox recently announced it was discontinuing the platform for swapping its tokens for deferred-payment clients.
"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," said Michele Wein Layne, regional director of the SEC's Los Angeles Regional Office, in a press release announcing the agency's lawsuit.
The complaint notes that Paragon Coin, a web-based company that raised about $12 million through an ICO to implement blockchain technology for the growing cannabis industry, was among the companies ICOBox helped get to market. The SEC imposed a $250,000 penalty against Paragon Coin late last year, and the company agreed to register its offering, make all associated filings, and compensate investors harmed by purchasing tokens in the offerings.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All
USPTO Director Kathi Vidal Announces Resignation Ahead of Administration Change
3 minute read
FTC Receiver Eyes Fraudulent Messages Ecommerce Company's Clients
Trending Stories
- 1Prior Inconsistent Statements and Medical Malpractice Defense
- 2Public Interest Calendar of Events
- 3Why Law Firms Should Focus on IA for Improved Gen AI
- 4Post-Pandemic Increase in Live Events Prompts Need for Premise Liability Action
- 5Companies' Dirty Little Secret: Those Privacy Opt-Out Requests Usually Aren't Honored
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250
