SEC Halts PlexCoin Scam ICO Using Emergency Court Order
The U.S. Securities and Exchange Commision (SEC) announced in a press release the acquisition of an emergency court order with intent to freeze the assets of the PlexCoin ICO.
The allegedly fraudulent ICO has been active since early August where it has raked in over $15 million from thousands of investors. The alleged scam promised its investors a highly unrealistic 13-fold return on investment in less than a month.
Following the large amount of money raised by the fast-growing ICO sector, the SEC’s newly formed Cyber Unit turned its sights on the fraudulent coin once it became apparent it was luring investors with falsities. The unit filed charges against PlexCorps, the company behind the ICO as well as its owner, Dominic Lacroix.
The Cyber Unit was created in September with the mandate to investigate crimes related to distributed ledger technology, initial coin offerings, misinformation through social, and electronic media as well as hacking and other threats to trading platforms. The unit utilizes experts within the SEC’s Enforcement Division to sniff out any irregularities in the cyber and tech-related fields.
Alluding to this swift legal action, the Chief of the Cyber Unit, Robert Cohen stated in the December 4 release:
“This first Cyber Unit case hits all of the characteristics of a full-fledged cyber scam and is exactly the kind of misconduct the unit will be pursuing. We acted quickly to protect retail investors from this initial coin offering’s false promises.”
According to the press release, the SEC filed the charges in a federal court in New York where it “alleges that Lacroix and PlexCorps marketed and sold securities called PlexCoin on the internet to investors in the U.S. and elsewhere, claiming that investments in PlexCoin would yield a 1,354 percent profit in less than 29 days.” In addition to charging Lacroix, the Cyber Unit also included his partner, Sabrina Paradis-Royer, in the litigation.
Lacroix has been under investigation by Quebec’s Autorité Des Marchés Financiers, which culminated in the authorities blocking PlexCorps from continuing its dealings. The SEC acknowledged assistance from Quebec on the case and was able to acquire an order to freeze PlexCorps assets based on its filing.
The charges are related to fraud with the regulator seeking certain bans on Lacroix and Paradis-Royer:
“The SEC’s complaint charges Lacroix, Paradis-Royer, and PlexCorps with violating the anti-fraud provisions, and Lacroix and PlexCorps with violating the registration provision, of the U.S. federal securities laws. The complaint seeks permanent injunctions, disgorgement plus interest and penalties. For Lacroix, the SEC also seeks an officer-and-director bar and a bar from offering digital securities against Lacroix and Paradis-Royer.”