The US Securities and Exchange Commission (SEC) has charged PlexCoin ICO organizer Dominic Lacroix, who raised $15 million through soliciting investors from the US and Canada, with illegally profiting from defrauding customers through off-market investment pools.
The regulator on Monday filed an emergency court order to freeze the assets of Lacroix and his associated company PlexCorps for arranging an ICO scheme that fraudulently touted lucrative investment returns. The SEC also charged Lacroix’s partner, Sabrina Paradis-Royer, with providing pool participants with false statements that misrepresented the ICO’s profitability claiming that it would yield a 1,354 percent profit in less than a month.
PlexCoin describes itself as a decentralized worldwide cryptocurrency that boasts a new revolutionary operating structure to make transactions faster, easier and safer than any other cryptocurrency.
Lacroix was the target of another order by the Autorité des marchés financiers, Quebec’s financial regulator, earlier in July. The Canadian province’s orders prohibited him and his partners from disposing of any funds, securities, or other property in connection with their activities relating to the sale of PlexCoin tokens.
Introducing NextV - The Full Scope Solution To Building Your Next Virtual EventGo to article >>
The PlexCoin saga is not Lacroix’s first run-in with North American regulators. Earlier in 2013, Lacroix and his company Micro-Prêts plead guilty to six charges of fraud and a Canadian court hit them with a $25,000 fine.
PlexCoin’s case is the first to be brought by the SEC’s new Cyber Unit, which was created in September to target violations involving distributed ledger technology and initial coin offerings (ICOs) as part of a new effort to fight cybercrime.
The SEC is seeking a permanent injunction, a judgement ordering the defendants to disgorge the profits with interest and to pay financial penalties, the agency said.
Robert Cohen, Chief of the Cyber Unit, commented: “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.”