Law Enforcement

SEC cyber squad halts cryptocurrency offering

Cyberattack, financial services 

The new Cyber Unit at the Securities and Exchange Commission stopped an ongoing cryptocurrency offering that has attracted up to $15 million in investment since launching in August.

The SEC's action against PlexCoin, marketed as a faster rival to Bitcoin, is the first from the Cyber Unit, which was created in September  2017 to focus investigators with experience in online fraud and other cyber scams on pursuing cases in blockchain-based cases including initial coin offerings for novel cryptocurrency products. Additionally, the Cyber Unit is addressing attempts to publicize such scams on social and electronic media using false information.

"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," Cyber Unit Chief Robert Cohen said in a statement. "We acted quickly to protect retail investors from this initial coin offering's false promises."

The defendants in the case allegedly promised returns of between 200 percent and 1,354 percent within 29 days, depending on the point at which a purchaser bought into the PlexCoin initial offering, according to the SEC complaint released Dec. 4.

The SEC is charging Canadian national Dominic Lacroix and his partner Sabrina Paradis-Royer in the scheme. According to the SEC, so far $810,000 of the approximately $15 million paid by investors in the offering has found its way to accounts that were set to come under the control of Lacroix and his associate. Thus far, the SEC alleges, the defendants "have misappropriated or attempted to misappropriate at least $200,000 of these amounts on extravagant personal expenditures."

According to the complaint, Lacroix and his associate flouted efforts by Canadian authorities to close down the initial coin offering.

About the Author

Adam Mazmanian is executive editor of FCW.

Before joining the editing team, Mazmanian was an FCW staff writer covering Congress, government-wide technology policy and the Department of Veterans Affairs. Prior to joining FCW, Mazmanian was technology correspondent for National Journal and served in a variety of editorial roles at B2B news service SmartBrief. Mazmanian has contributed reviews and articles to the Washington Post, the Washington City Paper, Newsday, New York Press, Architect Magazine and other publications.

Click here for previous articles by Mazmanian. Connect with him on Twitter at @thisismaz.


Featured

  • Defense
    Ryan D. McCarthy being sworn in as Army Secretary Oct. 10, 2019. (Photo credit: Sgt. Dana Clarke/U.S. Army)

    Army wants to spend nearly $1B on cloud, data by 2025

    Army Secretary Ryan McCarthy said lack of funding or a potential delay in the JEDI cloud bid "strikes to the heart of our concern."

  • Congress
    Rep. Jim Langevin (D-R.I.) at the Hack the Capitol conference Sept. 20, 2018

    Jim Langevin's view from the Hill

    As chairman of of the Intelligence and Emerging Threats and Capabilities subcommittee of the House Armed Services Committe and a member of the House Homeland Security Committee, Rhode Island Democrat Jim Langevin is one of the most influential voices on cybersecurity in Congress.

Stay Connected

FCW INSIDER

Sign up for our newsletter.

I agree to this site's Privacy Policy.