As corporate fundraising evolves, investors need greater protection
PlexCorps was the latest in a long line of hot initial coin offerings. The Montreal-based company had published a white paper, setting out the ways in which it would shake up the world of payments. It had raised $15m from thousands of investors.
In a Facebook user group, people were talking excitedly about a “bitcoin killer”. But the Securities and Exchange Commission had seen enough. Early in December it froze assets and filed charges against PlexCorps’ chief executive, Dominic Lacroix, who had previously faced allegations of securities violations north of the US border. This time,
Mr Lacroix was making extravagant claims of a 1,354 per cent profit in less than a month; and the SEC said it had evidence that he and his partner, Sabrina Paradis-Royer, had diverted some of the ICO proceeds to spend on home improvements. Mr Lacroix could not be reached for comment. It was the debut action from the SEC’s new cyber unit, a special team of about two dozen attorneys set up in September last year to crack down on cyber-related misconduct.
It was a very good case to begin with, says William Mougayar, a Toronto-based author and producer of the Token Summit, a conference about the emerging token-based economy, in New York and San Francisco. “The SEC showed they’re watching this space very diligently and are able to find out about companies not doing things 100 per cent right,” he says.
Source/More: SEC cyber unit eyes initial coin offerings with suspicion