The SEC's Cyber Unit filed its first case, charging PlexCorps and two executives with fraud. Dominic Lacroix and Sabrina Paradis-Royer marketed a digital token to thousands of investors in the United
The SEC's Cyber Unit filed its first case, charging PlexCorps and two executives with fraud. Dominic Lacroix and Sabrina Paradis-Royer marketed a digital token to thousands of investors in the United States and abroad. A federal judge issued an emergency order freezing their assets and halting the token sale.
Since August, PlexCorps had collected $15 million from buyers of PlexCoin. PlexCorps promised returns of 1,354 percent within twenty-nine days to investors—more than thirteen times their initial stake in less than a month. The SEC alleged those claims were false.
PlexCorps described itself as a Singapore-based operation deploying specialists across the globe. The company kept its executives hidden. Management said this prevented rival companies from recruiting its employees and protected personal privacy. The SEC uncovered a different reality. PlexCorps' actual staff consisted of a handful of people in Quebec working under Lacroix. No international team of experts existed. Lacroix concealed his identity for another reason: he had violated Canadian securities laws in the past, and revealing his involvement would have exposed investors to that history.
The SEC alleged that Lacroix and PlexCorps defrauded customers through false statements about returns. Both faced charges for selling unregistered securities. Paradis-Royer faced fraud charges as well.
Robert Cohen heads the Cyber Unit. "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," Cohen said. "We acted quickly to protect retail investors from this initial coin offering's false promises."
The Cyber Unit began operations in September 2017 to pursue fraud tied to blockchain technology and coin offerings, false statements spread through social media and digital channels, hacking of exchanges and trading platforms, and infrastructure threats.
Regulators around the world are tightening control over cryptocurrency. The UK Treasury and European Union governments announced new measures this week. The framework, set to take effect within months, requires cryptocurrency traders to verify their identities to prevent tax evasion and money laundering. Online trading platforms must check customer backgrounds and report questionable transactions. These measures aim to block illicit financial flows.
