Wed, Dec 06, 2017 - Page 10 News List

SEC shuts down digital currency investment scam

‘FALSE PROMISES’:PlexCorps said it could not identify the company’s executives over privacy reasons when in reality its owner was being pursued for securities law violations

AFP, WASHINGTON

The US Securities and Exchange Commission (SEC) on Monday said its newly created Cyber Unit shut down a digital currency investment scam, charging a company that took millions from investors by “falsely promising” a speedy, 13-fold profit.

The unit filed charges against and froze the assets of Dominic Lacroix, a Canadian with a history of securities law violations, and his company, PlexCorps, in an initial coin offering (ICO) fraud.

Using Facebook, the company sold securities called PlexCoin — which its Web site billed as “the next cryptocurrency” — to investors in the US and elsewhere, raising US$15 million since August, and promising a return of 1,354 percent within 29 days, the SEC said in a statement.

These were the first charges filed by the unit in September to focus on fraudulent ICOs of digital currency and other crimes.

“This first Cyber Unit case hits all of the characteristics of a full-fledged cyberscam and is exactly the kind of misconduct the unit will be pursuing,” the unit’s chief Robert Cohen said in a statement. “We acted quickly to protect retail investors from this initial coin offering’s false promises.”

The SEC won an emergency court order to freeze the assets of PlexCorps, Lacroix, 35, and his partner Sabrina Paradis-Royer, 26, accusing them of trading in unregistered securities.

PlexCorps promotional materials claimed the company’s executives could not be identified for security and privacy reasons when in reality this was because Lacroix had already been pursued by Canadian authorities for securities law violations, the agency said.

The SEC’s move comes amid rising interest in digital currencies, with the most well-established, bitcoin, seeing its value soar this year to dizzying heights, attracting both investor interest and skepticism.

The US Commodities Futures Trading Commission, which regulates trade in derivatives, last week cleared the way for mainstream exchanges, including the CME Group and Cboe Futures Exchange, to offer contracts for futures of the virtual currency.

Cboe was the first out of the gate on Monday, announcing it would launch bitcoin futures trading beginning on Sunday.

CME plans to allow trading in bitcoin futures later this month.

This story has been viewed 1252 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top