PlexCoin Ordered to Pay Almost $7 Million After Fraudulent ICO
Announced October 2nd 2019, the US Securities and Exchange Commission (SEC) has obtained a final judgement regarding PlexCoin’s 2017 Initial Coin Offering (ICO). According to the judgement, of which PlexCoin consented, the offering was fraudulent on multiple accounts resulting in PlexCoin being ordered to pay nearly $7 million.
PlexCoin’s ICO Fraud Explained
Back in 2017, the SEC halted PlexCoin’s ICO because of “fraud that raised up to $15 million from thousands of investors since August by falsely promising a 13-fold profit in less than a month”.
The unregistered sale of securities raised funds in both fiat and cryptocurrencies, and ultimately featured misleading statements directed towards prospective and actual investors. Examples include false claims concerning the size and scale of PlexCorps’ operations, the use of funds raised through PlexCoin’s ICO, and even the amount of funds raised.
Now, the proprietors behind PlexCoin’s ICO— which include PlexCorps, Dominic Lacroix, and Sabrina Paradis-Royer— have consented to a final judgement from the SEC.
According to a press release from the SEC,
“All Defendants are ordered to disgorge, on a joint and several basis, $4,563,468 in ill-gotten gains from the PlexCoin ICO plus $348,145 in prejudgment interest, and Lacroix and Paradis-Royer are ordered to each pay a $1,000,000 civil penalty. Lacroix also is permanently barred from serving as an officer or director of a publicly traded entity.”
Additionally, all parties are enjoined from participating in any digital securities offerings.
The judgement also requires the Defendants to surrender their rights to the entirety of the investor funds seized by a receiver appointed by the Superior Court of Quebec, which totals nearly $4 million, in addition to $800,000 in frozen investor funds held by US-based entities.
The SEC has been heavily involved in the digital asset space in recent weeks.
As a result, Coinbase recently teamed up with other exchanges and firms to create the ‘Crypto Rating Council’ to identify the odds of a digital asset being ruled a security by the SEC.
What do you think about the SEC’s final judgement against PlexCoin? Let us know what you think in the comments section below.
Image courtesy of the SEC.