SEC Takes Its First Action Against ICO Scams

SEC Takes Its First Action Against ICO Scams

PlexCorp, a cryptocurrency company that operates in Canada, has been accused of going against laws regarding securities by SEC by starting a $15 million ICO

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PlexCorp, a cryptocurrency company that operates in Canada, has been accused of going against laws regarding securities by SEC. This was after the company floated an Initial Coin offer  (ICO) worth about $15 million.

In the recent past, research has shown that companies that are just starting have managed to raise capital believed to be in the region of $3 billion using the ICO. This, according to experts, puts potential investors wishing to benefit from this growth into a lot of risks. This is made worse by the fact that the sector is not properly regulated.

With the promise that each PlexCoin would have a return of as much as 1354% within a period of 29 days, PlexCorp is alleged to have defrauded many investors who had taken an early step to ensure they benefited from the growth of the company.

Dominic Lacroix and Sabrina-Royer who are the founders of PlexCorp were also charged owing to the part they played in the fraud. Securities Exchange Commission (SEC) made an announcement that it had halted the company from using its assets in order to stop this ICO scam.

In July, an order preventing Lacroix from promoting the sale of PlexCoin was issued by Quebec Financial Markets Administrative Tribunal (QFMA). The move was meant to stop the official launch. In addition to this, contempt of court charges has also been preferred against Lacroix after he continued to promote the sale of PlexCoins.

Through their Facebook page, the company accused the media of reporting them as a company out to defraud members of the public. They have, however, not responded to any of our concerns. They went ahead to assure SEC and QFMA of their cooperation during the investigation process. They also promised to give a proper update on their website.

SEC has been seen to be cracking the whip given that this is the first charge made by its new cyber unit.This acts to assure people that action is being taken in a sector that is viewed to be largely unregulated. However, a real estate and a diamond company have also been charged in the recent past.

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