The Securities and Exchange Commission (SEC) has filed a lawsuit in a California federal court against ICOBox and its founder, Nikolay Evdokimov, over an allegedly illegal $14 million securities offering that occurred in 2017.

The lawsuit claims that ICOBox sold $14.6 million in unregistered digital assets—tokens known as “ICOS”—to more than 2,000 individuals. Court documents allege that the company made wild claims that the tokens would increase in value upon trading, and that they could be traded for other tokens offered by the enterprise at a discount. 

The SEC claims these ICOS tokens have little to no value. The Commission also alleges that ICOBox failed to register as a broker yet acted as one by supervising initial coin offerings that garnered more than half-a-billion dollars for its clients. One of those clients that made use of the ICOBox platform was the cannabis-industry-focused Paragon Coin, which settled charges with the SEC over its own multi-million-dollar ICO last year.

“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,” Michele Wein Layne, regional director of the SEC’s Los Angeles office, said in a statement. 

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The SEC has for the last two years aggressively gone after ICO-funded crypto startups that it deems violated federal securities laws. More recently, the SEC has also gone after those who promote the unregistered sale of blockchain-based tokens, such as the Russia-based cryptocurrency ratings site ICO Rating. 

Last August, ICO Rating agreed to pay a fine of nearly $269,000 to the SEC for shilling tokens sold in ICOs between December 2017 and July 2018. The SEC alleges that the company failed to “disclose payments received from issuers for publicizing their digital asset securities offerings.”

In the case of ICOBox, the SEC now seeks injunctive relief from the court, as well as civil penalties and “disgorgement of prejudgment interest” from both ICOBox and Evdokimov.