ICO Marketing Firm Faces SEC Charges

September 20, 2019   Ethereum

ICO Marketing Firm Faces SEC Charges For Misleading Investors

The Securities and Exchange Commission (SEC) has laid complaints against ICOBox, a firm that provides initial coin offering (ICO) marketing services for crypto related firms, and its CEO Nikolay Evdokimov. According to the allegations from the SEC, ICOBox violated US securities laws during its ICO, which was conducted in 2017.

During its ICO, Evdokimov’s firm raised $14.6 million from over 2,000 investors in the US. The firm promised these investors that the tokens they bought during the ICO would increase in their value once the company began trading. These investors were told that they would also be able to purchase additional tokens on ICOBox’s platform at a discount through the use of the tokens they bought during the ICO. The ICOS tokens proved to be worthless later, and this is a violation of the laws that govern this kind of offering.

The SEC’s complaint states that Evdokimov told investors in his firm that funds raised from the sale of the ICOS tokens would be used to cover the firm’s costs for providing its marketing services to crypto startups that cannot afford them. ICOBox claimed that they would support over 100 clients a month which would make their tokens highly valuable. To date, the ICO marketing firm has failed to provide support for a token sale to completion.

Services to other crypto startups

The regulatory body is also taking action against ICOBox for its role in the ICOs of several other crypto related firms. The SEC alleges that ICOBox was involved in the sale of over $650 million worth of digital tokens for dozens of crypto firms. By participating in these token sales, ICOBox acted as a broker. The company is not registered as a brokerage firm, and hence, its role in those token sales is illegal.

SEC’s recommendations

The SEC, through its action against ICOBox, is seeking refunds with interest for investors who participated in the ICO. They are also pushing for civil penalties to be instituted, and for the company to suffer injunctive relief.

According to Michele Wein Layne, Regional office Director in the Los Angeles Regional Office, ICOBox ignored the registration laws that govern providers of securities. Evdokimov and ICOBox put investors at risk by offering them digital tokens which are now worthless. They also did not provide these investors with the necessary information needed for one to make informed investment decisions. The absence of this vital information is a violation of the SEC’s regulations.

SEC action against ICO offerings

The SEC has taken action against several firms for violating securities laws through their ICOs. The regulatory body has taken different measures such as placing a hold on the ICOs as they are being conducted, freezing the assets of the firms involved in the ICOs, or suspending trading on these platforms.

There is a lack of clarity regarding what kind of digital tokens can be classified as securities. Some tokens do not constitute securities while some, because of certain characteristics they carry, fall under securities according to the SEC’s regulations.

Author: Ali Raza for Crypto-Rating.com

Related Crypto Market Materials

Top 10 upcoming ICOs

Rating Days, left
Ledder 4.9 310
Cinemadrom 4.6 65
Housinet 4.5 27
GOVEARN 4.4 310
BrandProtect 4.3 96
PointPay 4.3 513
WINBIX 4.2 216
EzyStayz 4.1 33
FRED Energy 4.1 94
EcoStart 3.7 35


Top 10 Crypto Brokers

Rank Status Broker
1 FXTM information
2 HYCM information
3 FIBO Group information
4 HotForex information
5 XM information
6 OctaFX information
7 easyMarkets information
8 LH Crypto information
9 USGFX information
10 Markets.com information


Top 10 Cryptocurrencies

Price, USD 24h 7 days
Bitcoin 9 602.231 -1.69% -1.38%
Ethereum 262.037 -2.26% -1.98%
XRP 0.270 -1.91% -6.88%
Bitcoin Cash 370.907 -5.04% -9.11%
Bitcoin SV 272.720 -5.99% -12.28%
Litecoin 74.358 -3.06% 0.86%
Tether 1.002 -0.07% 0.18%
EOS 4.078 -3.62% -7.97%
Binance Coin 21.656 -4.23% -7.86%
Tezos 3.056 -7.27% -5.12%


Top 10 Crypto Exchanges

Volume 24h, USD Change 24h
IndoEx 94 401 503 14.44%
BTSE 19 847 306 22.55%
Finexbox 6 217 521 0.00%
Binance 1 719 455 233 10.30%
BKEX 4 057 778 311 4.48%
TAGZ Exchange 3 485 560 734 11.50%
TAGZ 3 376 359 981 0.07%
BitMEX 3 250 475 781 11.95%
OKEx 2 988 919 923 0.31%
Coinsbit 2 794 743 203 0.52%