PlexCorps operated out of Montreal and raised up to $15 million from thousands of investors.
The Cyber Unit organized by the Securities and Exchange Commission (SEC) has shut down its first “full-fledged cyber scam” attempting to con $15 million out of investors staking a claim in an initial coin offering (ICO) that started in August. The Canadian company, PlexCorps, were selling securities called Plexcoin and swindling backers with false hope. They told investors that they would see over a 13,000% return on their investment in 30 days or less but were funneling the money for personal pleasures. The conclusion made by the unit was that “PlexCorps and the PlexCoin Token are a scam” and immediately froze their assets. The SEC is demanding the reimbursement of these funds along with interest and fines.
The founders, Dominic Lacroix and Sabrina Paradis-Royer, were operating out of Montreal, Canada and been on the radar since earlier this year. In July, The Quebec Autorité Des Marchés Financiers started to take note of the company’s apathetic attempts to cover up their tracks. Despite receiving demands to cease and desist, the SEC’s official lawsuit reported the:
Defendants have continued to defy the Quebec Tribunal’s orders, including the September Order, by misappropriating investor funds, and Lacroix and PlexCorps by continuing to make online postings marketing PlexCoin Tokens and PlexCorps.
This is just the tip of the iceberg, and red flags were raised by Paypal, Shopify, and Stripe for suspicious activity occurring within the company. Almost out of fate, would assets were frozen before Monday which was the date where over $800,000 were to be released to PlexCorps from Stripe’s 90-day administrative hold. Robert Cohen, head of the unit said in a statement that:
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 news paints a sad day for advocates of cryptocurrencies claiming that it holds so much promise for the future economy. With Bitcoin now over $11,000 per token and rising along with traditional financial institutions weighing in on offering more options for crypto users, this is a harsh blow to the confidence of momentum being built. This event also leans in favor of opponents such as the Chairman and CEO of JPMorgan Chase, Jamie Dimon, known for calling crypto investors ‘stupid’ and that bitcoin was nothing more than a ‘fraud.’
A few hours ago, the company denying all allegations, responded from its Plexcorp’s facebook page to the accusations being made against them saying :
We are being depicted as robbers, scammers and fraudsters everywhere in the media…All PlexCoin purchased were distributed and we are now listed on many cryptocurrency exchanges, We claim that PlexCoin is not a fraud since no one had their money stolen from us and once more, all purchased PlexCoin were distributed.
PlexCorps also mentioned that they will be making a huge update on their website later this week.
We’ll have to see how this pans out for the direction of cryptocurrencies as a whole and if this will impact the value of popular choices such as Bitcoin and Ether. Hopefully, the victims of this fraud will be compensated relatively quickly and accordingly.
The investigation against the company is conducted by conducted by Daphna A. Waxman, David H. Tutor, and Jorge G. Tenreiro of the New York Regional Office and the Cyber Unit, with assistance from the agency’s Office of International Affairs. The case is being supervised by Valerie A. Szczepanik and Mr. Cohen with the assistance of Quebec’s Autorité Des Marchés Financiers.
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