SEC reiterates motion for contempt against PlexCoin’s mastermind Dominic Lacroix

Maria Nikolova

The regulator says that evidence it has gathered from third parties in discovery shows Lacroix has continued to violate a temporary restraining order.

Shortly after the United States Securities and Exchange Commission (SEC) amended its complaint against cryptocurrency scheme PlexCorps, aka PlexCoin, and the people behind the scam – Dominic Lacroix and Sabrina Paradis-Royer, the regulator addressed the New York Eastern District Court explaining why its contempt motion concerning Lacroix is still relevant.

In a Letter to the Court, filed on Monday, March 4, 2019, the SEC argues that the Contempt Motion is not moot. The thrust of the Contempt Motion, the regulator says, was and remains that “Lacroix transferred some . . . Bitcoin . . . into accounts at a Canadian digital asset exchange . . . for conversion into fiat currency, and spent it on personal expenses,” after the Court entered the December 1, 2017 temporary restraining order and asset freeze.

“Nothing that has occurred in this litigation since the filing of the Contempt Motion has rendered moot Lacroix’s past contemptuous acts. To the contrary, the evidence the SEC has gathered from third parties in discovery appears to preliminarily show that Lacroix has continued to affirmatively violate the TRO even after the SEC filed the Contempt Motion”, the SEC says.

Nevertheless, given that discovery is nearing its conclusion and that the SEC may seek additional contempt based on Lacroix’s more recent conduct, and in order to conserve judicial and litigant resources, the SEC requests that the Court hold the Contempt Motion in abeyance (or deem it withdrawn without prejudice to refile) for sixty days.

In December 2017, the SEC took PlexCorps and the people behind the scheme to Court over an unregistered offer and sale of securities called “PlexCoin” or “PlexCoin Tokens” in a purported “Initial Coin Offering”. The amendments to the complaint, filed in February 2019, relate to additional deceptive acts and misstatements by the defendants, including statements relating to the amounts of funds raised during the PlexCoin ICO.

The SEC alleges that the defendants manipulated the amount of PlexCoin sold during the ICO, permitting them to sell PlexCoin to certain investors at inflated prices and to give the impression that the PlexCoin ICO was more successful than it actually was.

As alleged in the Amended Complaint, the defendants lied to investors about the amount of funds raised in connection with the PlexCoin ICO. Initially, that amount was said to be nearly $15 million but now it turns out to be approximately $8.5 million. Put otherwise, the defendants lied about the success of the ICO in order to lure more investors.

Read this next

Digital Assets

Kraken exits Middle East, closes UAE office

Digital currency exchange Kraken will close down its operations in Abu Dhabi, UAE and lay off the majority of its team focused on the Middle East and North Africa.

Industry News

CFTC comments on ION Cleared Derivatives issues after Russian-linked hack

“The ongoing issue is impacting some clearing members’ ability to provide the CFTC with timely and accurate data. As this incident unfolded, it became clear that the submission of data that is required by registrants will be delayed until the trading issues are resolved.”

Industry News

FCA took down 14 times more misleading ads in 2022 thanks to technology

The FCA has made significant improvements to the digital tools it uses to find problem firms and misleading adverts. These improvements have enabled it to work through a much larger number of cases compared with 2021.

Executive Moves

HKEX appoints ex-Goldman Sachs Matthew Cheong to lead platform’s focus on derivatives

“He has worked for a number of the world’s leading investment banks and his experience will be invaluable to HKEX as we continue to enhance our derivatives product offerings and build on our innovative and robust platform business, connecting capital with opportunities.”

Digital Assets

Zodia Custody and SBI Digital Asset Holdings launch JV for crypto asset custodian in Japan

“Zodia Custody is both proud and excited to be working with SBI DAH to help set up SBI Zodia Custody; the first tier 1 crypto asset custodian for institutions in Japan.”

Digital Assets

Paxos opens R&D center in Israel to focus on transaction signing and crypto custody security

“Paxos is looking to expand its team in Israel in 2023 and beyond, giving engineers the opportunity to work on cutting-edge financial products and shape the future of the global economy.”

Executive Moves

Stash appoints Liza Landsman as CEO to further grow investing app

Stash is an investing and banking app with over 2 million active subscribers. Its subscription plans start at just $3 a month, and offer a range of products including investing, banking, education, and advice.

Institutional FX

Invast Global ramps up its offering with 10 soft commodity CFDs

Sydney-based prime-of-prime provider Invast Global has expanded its offering with the addition of ten soft commodity CFDs, which increases their index and commodity CFD offering to 35 instruments.

Retail FX

FF Simple and Smart Trades says Goodbye to CySEC authorization

The Cyprus Securities and Exchange Commission (CySEC) confirmed that it has wholly withdrawn the Cyprus Investment Firm (CIF) licenses of FF Simple and Smart Trades Investment Services Ltd.