New Securities Cyber Unit Makes Progress (US News)
The U.S. Security and Exchange Commission recently created a cyber unit that is already showing progress, according to U.S. News & World Report. The new unit filed its first charges in federal court against a privately held company that had made an “initial coin offering” (ICO) under false claims. Cyber unit officials allege the company, PlexCorps, and it’s two top executives had defrauded investors.
A federal judge gave the SEC an emergency order to stop the ICO, which has raised $15 million from an unknown number of investors who had been told by PlexCorps that within a month, the offering would show a profit 13 times their initial investment.
ICOs can grow at explosive rates, which has made them a tool to raise capital by using bitcoin and other cybercurrencies to fund tech projects. This practice has caught the attention of regulators who say the schemes lack transparency.
The SEC filed a complaint in federal court in New York that alleges Dominic Lacroix of PlexCorps sold securities, called PlexCoin, through the internet to U.S. and overseas investors with the claim that their investment would produce a 1,354 percent profit 29 days or less. The SEC also charged Lacroix’s partner, Sabrina Paradis-Royer, who participated in the scheme.
The charges are the first filed by the SEC’s new cyber unit, which was formed in September to investigate misconduct involving distributed ledger technology, ICO, the spread of false information through electronic and social media and hacking.