SEC halts PlexCoin cryptocurrency offering
- By Adam Mazmanian
The new Cyber Unit at the Securities and Exchange Commission stopped an ongoing cryptocurrency offering that has attracted up to $15 million in investment since launching in August.
The SEC's action against PlexCoin, marketed as a faster rival to Bitcoin, is the first from the Cyber Unit, which was created in September 2017 to focus investigators with experience in online fraud and other cyber scams on pursuing cases in blockchain-based cases including initial coin offerings for novel cryptocurrency products. Additionally, the Cyber Unit is addressing attempts to publicize such scams on social and electronic media using false information.
"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," Cyber Unit Chief Robert Cohen said in a statement. "We acted quickly to protect retail investors from this initial coin offering's false promises."
The defendants in the case allegedly promised returns of between 200 percent and 1,354 percent within 29 days, depending on the point at which a purchaser bought into the PlexCoin initial offering, according to the SEC complaint released Dec. 4.
The SEC is charging Canadian national Dominic Lacroix and his partner Sabrina Paradis-Royer in the scheme. According to the SEC, so far $810,000 of the approximately $15 million paid by investors in the offering has found its way to accounts that were set to come under the control of Lacroix and his associate. Thus far, the SEC alleges, the defendants "have misappropriated or attempted to misappropriate at least $200,000 of these amounts on extravagant personal expenditures."
According to the complaint, Lacroix and his associate flouted efforts by Canadian authorities to close down the initial coin offering.