PlexCoin fraudsters tell Court that SEC engaged in tremendous overreach
Dominic Lacroix and Sabrina Paradis-Royer continue to allege that PlexCoin is like Bitcoin.
The individuals behind PlexCorps, doing business as PlexCoin and Sidepay.ca, a fraudulent scheme alleged to have obtained $15 million from investors, will be seeking to dismiss a complaint launched by the United States Securities and Exchange Commission (SEC) against them.
Let’s recall that in its complaint, filed with the New York Eastern District Court, the US regulator said that it had to take an emergency action to stop Lacroix, a recidivist securities law violator in Canada, and his partner Paradis-Royer from further misappropriation of investor funds illegally raised through the fraudulent and unregistered offer and sale of securities called “PlexCoin” or “PlexCoin Tokens” in a purported “Initial Coin Offering”.
SEC notes that the ICO for the PlexCoin Tokens was an illegal offering of securities because there was no registration statement filed or in effect during its offer and sale, and no applicable exemption from registration. The PlexCoin ICO was a general solicitation made using statements posted on the Internet and distributed throughout the world, including in the United States, and the securities were offered to the general public and have been sold to a large number of investors, including many in the United States and in the Eastern District of New York.
To avoid the registration requirements of the federal securities laws, Lacroix has attempted to refashion the PlexCoin Tokens as a “cryptocurrency” and likened them to Bitcoin, SEC explains. In reality, the regulator says, PlexCoin Tokens are securities within the meaning of the U.S. federal securities laws.
On Thursday, the individual defendants in the case, captioned Securities and Exchange Commission v. PlexCorps (1:17-cv-07007), filed a Motion with the New York Eastern District Court, indicating their intention to move to dismiss the case.
According to Dominic Lacroix and Sabrina Paradis-Royer, “the SEC has engaged in a tremendous overreach, toward persons who are not subject to personal jurisdiction in this judicial district, and toward transactions that are excluded from regulation under U.S. federal securities laws”.
The document submitted on Thursday emphasizes that Lacroix and Paradis-Royer are Canadian residents. The document continues to state that the duo were working in Canada to help launch “Plexcoin” – which is, like Bitcoin, a decentralized, blockchain-based cryptocurrency. This claim runs counter the SEC allegations, which say that Plexcoin was not like Bitcoin.
An interesting moment in the defendants’ Motion is their assertion that they specifically attempted to exclude US persons from participating in Plexcoin transactions by having would-be purchasers confirm that they were not a U.S. citizen, and were not purchasing on behalf a U.S. citizen.
“Thus, in order for a U.S. person to obtain Plexcoin, that person would have to lie, misrepresent their status as a U.S. person, and thus make payments to non-U.S. entities to acquire a non-U.S.-domiciled cryptocurrency through a transaction consummated outside the U.S.”, the defendants allege. Putting it otherwise, Lacroix and Paradis-Royer try to put the blame on the victims.
On December 14, 2017, the Court granted the SEC’s Motion for Preliminary Injunction and Asset Freeze orders against PlexCorps. The regulator had earlier secured such orders against Lacroix and Paradis-Royer.
