A Collaboration with the University of Pittsburgh
advertisement

SEC freezes assets of PlexCorp during initial coin offering for PlexCoins cryptocurrency

[JURIST] The US Securities and Exchange Commission (SEC) [official website] Cyber Unit announced [press release] Monday that it has obtained an emergency asset freeze against Dominic Lacroix, Lacroix's partner Sabrina Paradis-Royer, and his company, PlexCorps, after filing charges [complaint, PDF] alleging that the company's initial coin offering (ICO) for the cryptocurrency PlexCoins was a cyber scam.

Lacroix, Paradis-Royer and PlexCorps have been charged with violating anti-fraud provisions of US federal securities laws. Lacroix and PlexCorps were also charged with violating the registration provision of the federal securities laws. Lacroix has previously pleaded guilty in a Quebec court for securities fraud.

The ICO has so far raised $15 million since August and involves investments from thousands of individuals. The PlexCoins were marketed as being able to provide a 1,354 percent profit in less than 29 days. Lacroix and Paradis-Royer are accused of misappropriating $200,000 of the funds raised on "extravagant personal expenditures." Despite PlexCorps claims that the PlexCoin is a cryptocurrency, the SEC has stated that they are "securities within the meaning of the US federal securities laws."

This is the first set of charges made by the SEC's Cyber Unit, which was created in September. The unit is meant to focus on "misconduct involving distributed ledger technology and initial coin offerings, the spread of false information through electronic and social media, hacking and threats to trading platforms."

About Paper Chase

Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

© Copyright JURIST Legal News and Research Services, Inc., 2013.