SEC files ICO fraud charges

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The company had raised up to US$15 million from thousands of investors since August through the token sale by "falsely promising a 13-fold profit in less than a month", according to a release. In October, Quebec's Superior Court ruled LaCroix was in contempt of court for continuing to solicit investment into PlexCoins.

The U.S. Securities and Exchange Commission (SEC) has yet to show its hand regarding potential oversight of bitcoin, other cryptocurrencies, and initial coin offerings (ICOs).

While Canada's Autorité des marchés financiers (the "AMF"), issued an order against Plexcoin back in July, but the ICO seemingly still proceeded, suggesting potential difficulties with enforcing the order as the project's website remains live at the time of writing. In February 2013, Lacroix and his then company Micro-Prêts pleaded guilty before the Court of Quebec to six charges of illegal distribution, illegal practice and misrepresentations.

The SEC alleged that PlexCorps violated securities laws by marketing and selling up to $15m worth of cryptocurrencies, also called PlexCoins, to investors in the U.S. and elsewhere.

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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. Lacroix, Paradis-Royer and PlexCorps have been charged with violating the anti-fraud provisions, and Lacroix and PlexCorps with violating the registration provision, of the USA federal securities laws.

PlexCoin's case is the first to be brought by the SEC's new Cyber Unit, which was created in September to target violations involving distributed ledger technology and initial coin offerings (ICOs) as part of a new effort to fight cybercrime.

The charges were the first to be filed by the SEC's Cyber Unit, a newly formed group tasked to closely watch ICOs, among other digital innovations that could possibly harm investors.

The action was taken by SEC's new Cyber Unit with SEC further charging Lacroix's partner, Sabrina Paradis-Royer, in connection with the scheme. The SEC would also have Lacroix and Paradis-Royer barred from offering digital securities, and have Lacroix barred from holding officer-and-director positions.

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