The U.S. Securities and Exchange Commission (SEC) has charged PlexCoin ICO organizer Dominic Lacroix, who raised $15 million through soliciting investors from the U.S. and Canada, with illegally profiting from defrauding customers through off-market investment pools. The SEC acknowledged assistance from Quebec on the case and was able to acquire an order to freeze PlexCorps assets based on its filing.
Where the SEC actions becomes somewhat interesting is in terms of its global implications, with the PlexCoin and it's founder, Dominic Lacroix, described by the SEC as a "recidivist" securities law violator, being based in Quebec, Canada.
The SEC has charged Lacroix, his partner Sabrina Paradis-Royer, and PlexCops with violating the anti-fraud provisions, and Lacroix and PlexCorps with violating the registration provision, of the USA federal securities laws.
A Canadian cryptocurrency company that raised $15 million by promising investors a whopping 1,354 percent return on their money in just 29 days has been sued by United States regulators for ripping off its customers.
The charges are the first by the SEC's new cyber unit.
The regulator said this was the first case filed by its brand-new cybersecurity unit, aptly named Cyber Unit. However, experts have warned they can present several dangers to unsuspecting investors hoping to get into a hot new market as regulations are pretty loose. "We acted quickly to protect retail investors from this initial coin offering's false promises".
The charges are the first filed by the SEC's new cyber unit, created in September to focus on misconduct involving distributed ledger technology, ICOs, the spread of false information through electronic and social media and hacking.
The Cyber Unit, according to the SEC, was created with the objective of sniffing out nefarious activity in the crypto and initial coin offering space. The charges are the result of regulatory collaboration with the Autorité Des Marchés Financiers (AMF).
As per the SEC complaint, Lacroix, Paradis-Royer, and PlexCorps have been charged with violation of anti-fraud provisions. The complaint seeks permanent injunctions, disgorgement plus interest and penalties. Lacroix proceeded with the offering despite being enjoined by Quebec securities regulators and has "misappropriated or attempted to misappropriate at least $200,000 ... on extravagant personal expenditures", the commission said.