Simply setting up an ICO website? Prepare to respond to US authorities’ questions!

Maria Nikolova

SEC has received judicial assistance to compel PlexCoin’s Canadian assistant to co-operate in their investigation.

Being an “IT guy” or a marketing assistant at an entity involved in an initial coin offering (ICO) scam is not a matter to be taken lightly. The latest developments around PlexCorps, also known as PlexCoin, a virtual currency firm accused of running a $15 million ICO fraud in the United States, show that the US authorities are ready to approach any individual involved with such entities as the regulators continue to investigate scams related to cryptocurrencies.

On Monday, April 16, 2018, Judge Magistrate Judge Robert M. Levy sided with the Securities and Exchange Commission (SEC) by signing an order that asks the Quebec Superior Court for judicial assistance to compel the attendance of a witness at an oral deposition and the production of documents. The witness in question is Yan Ouellet, an employee of PlexCorps.

According to the SEC, Ouellet has assisted the firm in:

  • setting up and/or running PlexCorps’ and PlexCoin’s websites;
  • keeping track of the individuals who accessed the websites, including the identity of regulators and law enforcement agencies; and
  • opening accounts with and making a phone call to a payment processing vendor in the United States.

According to the SEC, Ouellet would have knowledge of relevant facts in the US prosecution of PlexCoin, including evidence regarding the offer and sale of PlexCoin securities in the United States; the truth or falsity of statements made by the defendants in connection with the PlexCoin ICO; the efforts, if any, made by the defendants to avoid offering or selling PlexCoin securities to United States investors; and the extent, if any, of contacts between the defendants and the United States with respect to the PlexCoin ICO.

The SEC seeks a variety of documents from Ouellet, including (inter alia) all documents and communications relating to the IP Addresses of any individual who visited any of the websites, social media accounts, discussion websites, or payment services any defendant used in connection with PlexCorps or the PlexCoin ICO, as well as all communications or documents that identify the place of business, residence, billing address, and/or physical location of all actual or potential purchasers of PlexCoin.

The case, captioned Securities and Exchange Commission v. PlexCorps (1:17-cv-07007), targets PlexCorps aka PlexCoin and, Dominic Lacroix and Sabrina Paradis-Royer. In its complaint, filed with the New York Eastern District Court in December 2017, the US regulator says 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”.

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