SEC Settles Lawsuit against PlexCoin ICO for $7 Million

The US Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission (SEC) has reached a settlement with the promoters of the illegal crypto scheme PlexCoin.

According to court documents, the founder Dominic Lacroix and his partner Sabrina Paradis-Royer agreed to pay $1 million each as a civil penalty and will never participate in securities offerings again. The company PlexCorps, aka PlexCoin, has been fined with $4.56 million, along with an interest of an additional $350,000.

Another crypto scheme promising massive returns

The securities watchdog filed a lawsuit against the company and its promoters in September 2017, after the firm raised millions in an Initial Coin Offering (ICO) Initial Coin Offering (ICO) An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Acco Read this Term). The company assured investors of a 13-fold return within a month.

The SEC alleges that Lacroix used the funds in personal transactions and charged the firm for issuing materially false and misleading statements, and misappropriation of investor assets in connection with the ICO. In December 2017, the agency obtained an emergency asset freeze against the company to stop its token offering.

The securities regulator also filed an amended complaint alleging that the firm and its founder false reported the figure raised in the ICO. The defendants initially claimed that the amount was $13 million, however, according to the SEC it only raised $8.3 million. It also alleged that $600,000 of the investors’ funds were used personally by Lacroix.

“PlexCorps is pleased to achieve this settlement with the Securities and Exchange Commission, in which it is cooperating with the SEC to ensure that U.S. purchasers of Plexcoin will be eligible to receive a refund directly from the SEC,” Morrison Cohen, a partner at Jason P. Gottlieb, representing PlexCorps, said.

Actions against illegal ICOs

With the boom in the ICO market in 2017, many players engaged in raising funds fraudulently, as the structure omitted the need to showcase a working product or prototype. This also alarmed the SEC which since busted dozens of illegal and fraudulent projects.

Most recently, the agency filed a lawsuit against Reginald Middleton and two of his firms, both named Veritaseum, for involvement in an unregistered token sale.