PlexCoin ICO Fraud Pursued By SEC Lawsuit For $400,000,000 In Contributions
Another supposed start-up goes on the list for committing fraud in the crypto-marketplace. PlexCoin is now just one of the many starting companies that is being taken through litigation in court by the SEC. The new company blew up at their start and took in around four hundred million dollars from different contributors in the industry. Some of these were individual investors and others were contributors to the project. The two who placed the lawsuit against the company were Canadian born citizens. One man and one woman. Dominic Lacroix and Sabrina Paradis-Royer both opened the suit together against the organization on the first of December 2017.
Lacroix has gone through legal cases in the past, for fraud and was found guilty in front of the Quebec Financial Markets Administrative Tribunal. Even though the company is going through some legal issues, they are still up and running and the tokens can be purchased and hosted online. They have an ultra-slick website presentation, but this could be just fluff and filler. One of the common problems that happens in the crypto space is people thinking because a website looks good, the company must be trustworthy. But that is not the reality, sometimes just because a site looks good, doesn’t mean it is good.
Th ICO basically sold itself with ease. It did so because of the claims they made. They offered a anonymous system that used the newly emerging blockchain technology that is highly reliable for privacy and security. They were looking for upwards of four hundred million from investors as a final cap.
They ended up getting about fifteen million in funding and also managed to get a following of about ten thousand on Facebook.
SEC Example Set
Apparently, a report was already filed stating that the SEC was creating a list of top ICOs that would be considered dangerous. They were considered dangerous because they didn’t hold security standards that are required. And the entities on this list had potential for security breaches and other issues. Also, legislation was brought against them that stated their framework was not regulated properly and considered inefficient by traditional standards. And they are not just considered inefficient but actually inadequate by even the minimal requirements set on the industry. It really comes down to their fundraising model is not reliable or trustworthy in the eyes of the courts.
The SEC made a final decision in July of 2017, that only certain ICOs would qualify as securities and when they did, would be liable in this remit. Since July, there have been many frauds when it comes to ICOs. They’ve basically become targets for regulators and there are dozens of lawsuits now in effect against companies like Tezos, DAO and others.