The U.S. District Court for the Central District of California granted the SEC a default judgment against a limited liability company and its CEO for acting as an unregistered broker-dealer and selling unregistered securities in the form of initial coin offering ("ICO") tokens.
In the Order granting the SEC's motion for default judgment, the Court described ICOBox as an "incubator for digital asset startups" which sold approximately $14.6 million in unregistered ICO tokens. The Court found that ICOBox did not register the ICO tokens because ICOBox and its CEO believed that the tokens were not securities and were exempt from registration due to an unspecified utility.
The Court ordered (i) a permanent enjoinment from further violating SEC rules, (ii) disgorgement, including prejudgment interest of $16,059,428.99, and (iii) a civil penalty fine of $192,768.
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