The Securities and Exchange Commission has swung into action and frozen the assets of Canadian crypto company PlexCorp. The agency has consequently charged the company’s founders for violating securities laws by selling up to $15 million in a fraudulent Initial Coin Offering.
The agency in a statement accuses Dominic Lacroix and Sabrina Paradis-Royer, of defrauding unknowing investors by falsely promising big profits on taking part in the ICO. The two allegedly used PlexCoins, the company’s cryptocurrency, to defraud would-be investors hoping to cash in on the frenzy around Initial Coin Offerings.
“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,” said SEC Chief of cyber unit, Robert Cohen.
This is not the first time that PlexCorp has come under scrutiny from regulators. The Quebec Financial Markets Administrative Tribunal scrutinized the business and eventually banned it over fraudulent claims. Quebec Superior Court has since declared the company and its founders of being in contempt of court.
Prior to the SEC investigation, PlexCoins just like other cryptocurrencies was on an impressive run. Ever since the company’s assets were frozen and the co-founders charged, the cryptocurrency has taken a dip and continues to hit lower lows.
While price decline is a point of concern, trading platforms that had listed the Cryptocurrencies Initial Coin Offerings could find themselves in trouble with regulators. Some of the exchanges that could come under scrutiny include EtherDelta, Cryptopia, and CoinExchange.
The crackdown on PlexCorp affirms regulators growing scrutiny in a sector that continues to thrive under minimum regulatory scrutiny. In September, the SEC charged a diamond and a real estate initial coin offering for defrauding investors.
The growing popularity of cryptocurrencies has led to an increase in Initial Coin Offerings as companies venture into the space to raise funds. Companies have used ICO’s to raise $3 billion in capital this year alone. Amidst the growth, experts have warned that such offerings could present several dangers to unsuspecting investors as regulations needed to prevent scammers are loose.
In a bid to protect investors amidst the growing popularity of cryptocurrencies, the SEC has formed a new cyber unit that will focus on initial coin offerings. It awaits to be seen which other ICOs will come under scrutiny as the unit swings into action.
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Image courtesy of Thierry Ehrmann via Flickr
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Is Unification (UND) XRP 2.0? IEO April 10th at UTC+8 on Bitforex!
Unification is a Hybrid blockchain solution for Enterprise. Above is my interview with CEO Neyma Jahan I explore what is Unification, how does a WRKchain actually work and why is this something people will quickly adopt. What is a really telling story here is that this is one of the few ICO/IEO/ITO etc… that actually is revenue positive which I honestly could not think of many others that were?
Neyma and team come from a background in real business, and they are focused on bringing blockchain adoption to the next level. They decided to go with the WRKchain or better known by some as a permissioned sidechain so that nodes can work together even if they do not like each other.
In education, we have tons of issues with plagiarism in universities and several, miss this and people write half copied thesis papers and get away with it. Imagine now for papers across Ivy league to Community colleges a system where professors come to a consensus about papers. Now also think of it this way those professors reading this paper all must read it, evaluate it, and come to a consensus. This will take out the professor knowing that student and give an honest overall evaluation. So each professor is basically a node. Then for each paper, there would be…
Adoption from the grass roots: The reason its just not happening yet!
As someone who has been extremely involved in the cryptocurrency space the past 2 years, and 6 as an investor I want to point some things out.
- The whole space is full of egomaniacs
When I first got involved as an investor in 2013 buying 2.5 BTC I thought very little of where it could go. It was a small tight group of believers back then. As the space evolved you found there were more and more Craig Wright’s. What I mean by that is there were tons of people with massive egos who did not care what others said. It was okay before 2016-2017 as I wasn’t so closely following what was going on.
Once I got involved in the space more quit my job and went deep into the space I noticed something. I saw a tom of egomaniacs pretending they really knew what they were talking about, I saw people acting like they knew everything about everything and I saw CEOs who had little to no hope other than big talk and hopium.
In my opinion, we need more humble leaders in the space, people who truly care about it more than making as much money from people as they can. People who aren’t showing off watches during a hash war that ended with zero winners, and led us into the longest crypto winter…
Stablecoins aren’t the answer for Crypto!
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Jamie Dimon and Bitcoin
JP Morgan’s Jamie Dimon is well known for his hatred of Bitcoin and love for the blockchain. It is understandable that he does not really have any clue what Bitcoin was created for or where its inherent value comes from. In a clip from 2017 at the Institute of International Finance seen HERE. Jamie Dimon was cautioning people saying bitcoin will one day hurt them, that bitcoin has no value, that blockchain is amazing and he loved it. Its really odd that a man would have such a hate for bitcoin and it was also clear that he did not understand the cash he values so highly loses 2-3% per year from inflation.
Inflation of currencies
To put that last statement into perspective, the USD loses between 2-3 cents of inherent value each year. This means if you leave money in the bank the last 5 years your 1 USD from 5 years ago is now worth only $.90. Yes that actually is true and how inflation works, but with bitcoin if you had bought a dollar in 2013 at say around $100 BTC your 1% of the BTC today would be worth over 35USD today. This is because Bitcoin’s price is based on supply and…