PlexCoin: SEC shuts down get-rich-quick ICO, freezes $15M assets
Washington, D.C. Dec. 4, 2017 (The Ferowich Report)–The U.S. Securities and Exchange Commissions has let the world knows it plans to take initial cryptoasset offering scams seriously moving forward.
The agency obtained approval to freeze $15 million from PlexCorps for selling unregistered securities that the company said would produce 1,354 percent returns in less than one month, SEC said. Dominic Lacroix and Sabrina Paradis-Royer are mentioned as the securities law violators and fraudsters behind PlexCorps.
Lacroix plead guilty to six charges of securities fraud in 2013.
The case comprises “exactly the kind of misconduct” that the newly formed Cyber Unit will pursue, said Robert Cohen, head of the regulator’s cyber unit.
The main plexcoin.com site uses phrases like, “will you jump on the bandwagon?” and says that its technology “implies success for PlexCoin as soon as it launches.”
The site even claims that “one of the many features of PlexBank will be to secure your cryptocurrency from market variation, which is highly volatile, and invest your money in a place where you can get interesting guaranteed returns.”
“The first Cyber Unit case hits all of the characteristics of a full-fledged cyber scam,” Cohen said. “We acted quickly to protect retail investors from this initial coin offering’s false promises.”
In addition to the scam promises, PlexCorps had been bragging on its Facebook page December 1 about an apparently successful 698.03 percent PlexCoin price increase over 24 hours.
The SEC cooperated with Quebec’s Autorité Des Marchés Financiers (AMF) on the case.
Update (6:14 p.m. EST): PlexCorps issued a statement on Facebook stating “what is now being published in the media goes too far. We are being depicted as robbers, scammers and fraudsters everywhere in the media. They are smearing our name.” The group said “you will notice that no accusations were deposed against the defendants so far in Canada.”
According to Quebec’s financial regulator, AMF, a legal tribunal ordered “Facebook Canada Ltd. to close the Facebook accounts of PlexCorps and PlexCoin” back in July.
Lacroix was found guilty of contempt of court for failing to respect ex parte orders to cease “engaging in activities for the purpose of directly or indirectly trading in any form of investment,” Law in Quebec reports.
When Lacroix appeared before court November 14, AMF demanded Lacroix go to jail on the spot for six months and pay a $100,000 fine, according to Radio Canada. Lacroix’s attorney said he was a “little stunned” by AMF’s demands. The judge delayed making a decision, the news outlet reported.
Why it matters: The SEC has waffled on the status of cryptoassets as “securities.” The latest move shows the agency intends to use the 1930s era securities laws for cracking down on some cryptoasset offering activity.
The complaint charged Lacroix, Paradis-Royer and PlexCorps with violating anti-fraud statues and Lacroix and PlexCorps with failing to register the cryptoassets as securities.