The U.S. Securities and Exchange Commission (SEC) alleged that ICOBox and founder Nikolay Evdokimov violated securities laws with its 2017 token sale and subsequent activity facilitating other initial coin offerings (ICOs).

According to a press release Wednesday, Evdokimov raised $14.6 million by selling “ICOS” tokens to more than 2,000 individuals, promising customers that the tokens would increase in value once it began trading. Moreover, token holders were told they could purchase other tokens on the ICOBox platform at a discount using their ICOS tokens.

“According to the complaint, the ICOS tokens are virtually worthless,” the release says.

The complaint itself specifies that, “ICOBox and Evdokimov told investors that the offering proceeds would be used to cover the cost of providing ICOBox’s planned services to digital asset startups that could not afford them,” adding:

“Defendants claimed that ICOBox would be successful — and the ICOS tokens valuable — due to the efforts of ICOBox’s management team, who would curate potential digital asset projects and attract ‘100+’ clients per month. As of the date of ICOBox’s offering, ICOBox had yet to support a single token sale to completion.”

In addition to the sale itself, ICOBox facilitated the sale of another $650 million in token sale for “dozens of clients” through its platform, thereby acting as an unregistered broker, Wednesday’s release said.

The agency is looking for Evdokimov and ICOBox to refund investors with interest, pay civil money penalties and suffer injunctive relief.

In a statement, SEC Los Angeles Regional Office director Michele Wein Layne said, “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.”

SEC image via Shutterstock