The US Securities and Exchange Commission (SEC) is seeking a default judgment against Nikolay Evdokimov and his Cayman Islands firm ICOBox.
The agency is also seeking permanent enjoinment of Evdokimov and ICOBox, a $16,059,428.99 disgorgement and a civil penalty against Evdokimov of about $190 000 USD.
According to the SEC, “defendants conducted an unregistered securities offering and acted as unregistered securities brokers for ‘initial coin offerings’ (‘ICOs’)…” and, with “reckless disregard” for relevant laws, sold about $14.6 million in crypto tokens to about 2000 investors, including Americans, between August 9, 2017, and September 15, 2017.
The defendants allegedly facilitated on the platform token sales totaling $650 million USD for 30 clients, “charging ‘success fees’ of 1.5% of the amounts raised.”
Notably, one of the token sales on the platform was conducted by Paragon, a marijuana startup sanctioned by the SEC for selling unlicensed securities.
In January of last year, after Paragon had already been sanctioned by the SEC, the Paragon Coin pumped 6800 on a Russian exchange.
The SEC says it “personally delivered” a summons to Evdokimov’s residence in Beverley Hills on September 21, 2019. The agency says the summons was received by Evdokimov’s wife, Maria Batura, but in the coming days, “Evdokimov, Batura, and ICOBox vacated the Beverly Hills premises.”
Accordingly, “The SEC now moves under Rule 55(b)(2) for entry of default judgment against defendants, permanently enjoining them from future violations…ordering them jointly and severally to disgorge ill-gotten gains in the amount of $14.6 million with prejudgment interest of $1,459,428.99; and imposing a civil penalty against Evdokimov of $189,426.”
In September, Philip Moustakis, former senior counsel at the SEC who pursued the agency’s first crypto-related action, told Crowdfund Insider that the ICOBox enforcement, “was a smart case for the SEC to bring because, according to the allegations, it cuts off a channel for the issuance of unregistered digital securities in the U.S.”
“Furthermore, the action may now cause token issuers whose ICOs were facilitated or marketed by ICOBox to take another look at their offerings, determine what federal securities law issues, if any, they may have, and consider appropriate remedial steps,” Moustakis said.