SEC Sues to Stop Alleged ICO Fraud, Wins Emergency Asset Freeze

SEC Sues to Stop Alleged ICO Fraud, Wins Emergency Asset Freeze

ICO

In the first filing of charges brought by the US Securities and Exchange Commission’s new cyber unit, the agency has sued what it called “a fast-moving initial coin offering fraud.” The SEC filed charges against Dominic Lacroix, of Quebec, Canada, and his company, PlexCorps.

According to the agency’s complaint, filed in New York, Lacroix and PlexCorps allegedly marketed and sold securities called PlexCoin on the Internet to investors, claiming they would yield a 1,354 percent profit in less than 29 days. Lacroix’s partner, Sabrina Paradis-Royer, also was charged. According to the SEC, this purported scheme raised up to $15 million from thousands of investors since August.

Based on its filing, the SEC obtained an emergency court order to freeze the assets of PlexCorps, Lacroix, and Paradis-Royer. The SEC accuses Lacroix, Paradis-Royer, and PlexCorps of violating the anti-fraud provisions of US federal securities law. The agency also alleges Lacroix and PlexCorps violated the registration provisions of said laws.

The complaint seeks permanent injunctions, disgorgement plus interest and penalties. For Lacroix, the SEC also seeks an officer-and-director bar and a bar from offering digital securities against Lacroix and Paradis-Royer. The company is also being investigated by Quebec’s Autorité Des Marchés Financiers (Financial Markets Authority) or QAMF over its offering activities.

In response, PlexCorps said on its Facebook page: “We are being depicted as robbers, scammers, and fraudsters everywhere in the media. They are smearing our name with some allegations that can sometimes be false or misleading… All PlexCoin purchased were distributed and we are now listed on many cryptocurrency exchanges. We claim that PlexCoin is not a fraud since no one had their money stolen from us…. There is a big difference between not being accused, presumably being accused and being guilty.” The company also pledged to cooperate with the SEC and the QAMF.