PlexCoin ICO Fraud

Notice: This page is a freshly imported case study from the original repository. The original content was in a different format, and may not have relevant information for all sections. Please help restructure the content by moving information from the 'About' section to other sections, and add any missing information or sources you can find. If you are new here, please read General Tutorial on Wikis or Anatomy of a Case Study for help getting started.

Notice: This page contains sources which are not attributed to any text. The unattributed sources follow the initial description. Please assist by visiting each source, reviewing the content, and placing that reference next to any text it can be used to support. Feel free to add any information that you come across which isn't present already. Sources which don't contain any relevant information can be removed. Broken links can be replaced with versions from the Internet Archive. See General Tutorial on Wikis, Anatomy of a Case Study, and/or Citing Your Sources Guide for additional information. Thanks for your help!

PlexCoin

PlexCoin promised a large payment service, supposedly with a partnership with Visa and other financial services. They raised over $8m in funds from investors. Regulators charged them with fraud and appear to have redistributed the collected funds to investors.

This is a global/international case not involving a specific country.

About PlexCoin

"PlexCoin is the next decentralized global cryptocurrency based on the Ethereum structure. Its mission is to broaden the possibilities of use and increase the number of users by simplifying its management process as much as possible." "The PlexCoin presale will be one of the biggest this year."

"PlexCoin is a cryptocurrency (private internet currency), which has a value based on the current market. In other words, PlexCoin is an "open code" global currency, which is fully decentralized with no central authorities. This means that your transactions will not be managed or verified by traditional banking institutions. Users can now privately control their own finances."

"Compared to Bitcoin (45 minutes), transactions (deposit, withdrawal, purchase, sale, transfer) of PlexCoin are faster (30 seconds) to confirm and have increased storage efficiency. PlexCoin's revolutionary new operating structure is safer and much easier to use than current cryptocurrencies. This suggests a significant success for PlexCoin as soon as it is launched."

"You will be able, with your PlexCoin, to make your normal transactions and spend your money with your PlexCard VISA © card anywhere in the world. It will also be possible to send or receive funds to anyone, completely privately."

"With the PlexWallet, you can, among other things, exchange your PlexCoin for Bitcoins, Ethereum, Litecoin or even buy or sell your PlexCoins directly for CAD, USD or EUR money."

"With PlexBank, one of the services available will be to shelter your cryptocurrency from market fluctuations, which are very volatile, and thus ensure that your money has very attractive guaranteed returns. PlexBank - The first private cryptobank."

"Launched in August of 2017 PlexCoin’s ICO lasted for 4 months and then was stopped by SEC. PlexCoin promised a nicey nice return of 1,354% to the investors. All the raised money ($15 million) were frozen. Currently, it’s not clear what will happen to the company and the unlucky investors." "PlexCorps raised $8,269,218 from PlexCoin’s ICO using these claims."

"On December 1, 2017, the SEC filed a Complaint against PlexCorps, Dominic LaCroix ("LaCroix"), and Sabrina Paradis-Royer ("Paridis-Royer") (collectively, the "Defendants"), and at the same time, sought and obtained temporary restraining orders, to stop the Defendants' dissemination of a series of material false and misleading statements and the misappropriation of investor assets in connection with the illegal offering for unregistered securities known as PlexCoins through the PlexCoin Initial Coin Offering ("ICO"). In its complaint, the SEC alleged that PlexCorps, and its proprietors Lacroix and Paradis-Royer, fraudulently raised millions of dollars in virtual and fiat currency from the unregistered sales of PlexCoin based on a series of false and misleading statements to potential and actual investors, including misrepresentations about the size and scale of PlexCorps' operations, the use of funds raised in the PlexCoin ICO, and the amount of funds raised in the PlexCoin ICO. The SEC charged the Defendants with violations of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b- 5], and Section 17(a) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. § 77q(a)]; and Lacroix and PlexCorps with violations of Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a), 77(e)(c)]. See the SEC's Complaint."

"On October 2, 2019, the U.S. District Court for the Eastern District of New York (the "District Court"), entered a final judgment against PlexCorps, Lacroix, and Paradis-Royer (the "Final Judgment"). Pursuant to the Final Judgment, the Defendants, without admitting or denying the allegations in the SEC's Complaint, are enjoined from further violations of Section 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule l0b-5 thereunder, and Lacroix and Paradis-Royer are additionally enjoined from violations of Sections 5(a) and 5(c) of the Securities Act and from participating in any digital-securities offerings. All Defendants are ordered to disgorge, on a joint and several basis, $4,563,468 in ill-gotten gains from the PlexCoin ICO plus $348,145 in prejudgment interest, and Lacroix and Paradis-Royer are ordered to each pay a $1,000,000 civil penalty. The Final Judgment requires the Defendants to forego their rights to the entirety of the investor funds seized by a receiver appointed by the Superior Court of Quebec, totaling approximately $4 million (the "Canadian Receiver"), as well as $800,000 in investor funds held by U.S.-based entities that were subject to an asset freeze issued by the District Court. See the Final Judgment."

"The SEC anticipates coordinating any distribution to harmed investors with the Canadian Receiver. On or about November 20, 2019, the SEC staff directed an Investor Notice of Distribution Plan to individuals and entities identified as having expressed interest in, or invested in, the ICO. If you invested in PlexCoin through the ICO, please review this notice."

"The Canadian Receiver's website, which currently includes information in both English and French, including notices to investors, is located here."

"On January 2, 2020, the SEC filed a status report with the Court, updating the Court on the status of the disposition of the assets collected in the United States in this matter. In its status report, the SEC references a December 6, 2019, letter sent to the Court by Skip Shapiro, available here."

"On January 31, 2020, the Receiver moved the Superior Court in Quebec, Canada, for a Declaratory Judgment; see English translation. The SEC has taken the position reflected in this letter regarding the request, sent by its local counsel to the Superior Court. On February 26, 2020, the Receiver filed a Report concerning the Request to Obtain a Declaratory Judgment. On or about March 25, 2020, the Receiver filed an Amended Report; see English translation."

"On October 15, 2021, the Canadian Receiver filed an interim Report on the Claims Procedure and on a Possible Distribution Plan. An English translation of that Report is available here. In the Report, the Canadian Receiver “outlines an overview of proofs of claim that were produced during the period from May 7 to August 4, 2021,” “raises the main issues identified during the analysis,” and discusses the principles suggested by the interim Administrator in light of a possible distribution plan.” (Interim Report, paragraph 1.4)."

"The Québec Superior Court asks any person holding a claim in the matter of Dominic Lacroix to file a proof of claim with Raymond Chabot Administrateur Provisoire Inc., appointed Receiver of Dominic Lacroix, no later than on August 4, 2021." "On December 10, 2021, the Canadian Receiver filed a motion seeking approval of modified distribution plans. Written objections are due by December 22, 2021."

“All Defendants are ordered to disgorge, on a joint and several basis, $4,563,468 in ill-gotten gains from the PlexCoin ICO plus $348,145 in prejudgment interest, and Lacroix and Paradis-Royer are ordered to each pay a $1,000,000 civil penalty. Lacroix also is permanently barred from serving as an officer or director of a publicly traded entity.”

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - PlexCoin ICO Fraud

Date	Event	Description
December 5th, 2017	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $8,269,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

The total amount recovered has been estimated at $8,269,000 USD.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.