SEC Halts PlexCoin Scam ICO Using Emergency Court Order

SEC Halts PlexCoin Scam ICO Using Emergency Court Order

PlexCorp also attempted to fraudulently hide Lacroix's involvement in the business because of his "status as a recidivist securities law violator in Canada", the complaint said.

PlexCorps, the complaint says, had obtained $15 million from investors since August 2017 with the promise of "rewards of 1,354 percent in 29 days or less". The PlexCoin ICO had previously been held in contempt of court in Quebec as the provincial regulators had pursued the alleged fraud.

Using Facebook, the company sold securities called PlexCoin - that its website billed as "the next cryptocurrency" - to investors in the U.S. and elsewhere, raising US$15 million since August, and promising a return of 1,354 per cent within 29 days, the SEC said in a statement.

Lacroix has been under investigation by Quebec's Autorité Des Marchés Financiers, which culminated in the authorities blocking PlexCorps from continuing its dealings.

However, the SEC claims there was no "team" working at PlexCorps-there was only Lacroix and a small group of his employees working in Quebec.

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The agency recommends that people considering an investment in an ICO should do their research, look for a company's SEC filings in the EDGAR system and be wary of any ICO claiming to be "SEC-compliant" without explaining how the offering complies with securities law. In 2013, he and one of his companies pleaded guilty to six counts of "illegal placement, illegal practice, and transmission of false or misleading information" and were fined $25,000 CAD.

These were the first charges filed by the unit the SEC created in September to focus on fraudulent initial coin offerings of digital currency and other crimes.

The SEC's complaint charges Lacroix, Paradis-Royer and PlexCorps with violating anti-fraud provisions of the federal securities law, and Lacroix and PlexCorps with violating registration provisions, the SEC said.

"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", Robert Cohen, Chief of the SEC's Cyber Unit, said in a statement. The SEC also charged Lacroix's partner, Sabrina Paradis-Royer, in connection with the scheme.

Perhaps supporting that claim, the announcement was issued exactly two months after the SEC's shot across the bow of the ICO market - a July 25 investor bulletin that said us securities law may apply to digital token sales.