The U.S. Securities and Exchange Commission (SEC) has taken down a cryptocurrency scam offering. According to the SEC website, the commission has obtained an emergency asset freeze to halt a fast-moving initial coin offering (ICO) fraud. While this is not technically a bitcoin fraud, the reality is that it shows 1) how willing the public is to chase gains and 2) how willing potentially scammers are to dupe people out of their money.

What matters here is that this fraud is said to have that raised up to $15 million from thousands of investors since August. The Canadian group was led by “a recidivist Quebec securities law violator” named Dominic Lacroix, and his company name is PlexCorps. The SEC also charged Lacroix’s partner, Sabrina Paradis-Royer, in connection with the scheme.

Among the allegations is that Lacroix and PlexCorps marketed and sold securities called PlexCoin on the internet to investors in the United States and elsewhere. The claim was that PlexCoin would yield a 1,354% profit in less than 29 days.

The SEC’s complaint was filed in federal court in Brooklyn, New York. According to the SEC release, the enforcement agency obtained an emergency court order to freeze the assets of PlexCorps, Lacroix and Paradis-Royer.

The new complaint seeks permanent injunctions, disgorgement plus interest and penalties. For Lacroix, the SEC also seeks an officer-and-director bar and a bar from offering digital securities against Lacroix and Paradis-Royer.

While there may be other scams out there, this was said to be the SEC’s first charges filed by its new Cyber Unit. The cyber crime unit was created just in September, and it is said to be looking into “misconduct involving distributed ledger technology and initial coin offerings, the spread of false information through electronic and social media, hacking and threats to trading platforms.”

Robert Cohen, chief of the Cyber Unit, said on Monday:

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. We acted quickly to protect retail investors from this initial coin offering’s false promises.

This was not exactly a knock against bitcoin and other existing cryptocurrencies. That being said, and considering some of the other international crime stories that have come up around cryptocurrencies in the past few weeks to months, there are many people willing to sucker other people out of their hard-earned money in this space.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.