(Dow Jones) - The US Securities and Exchange Commission on Monday announced its first-ever enforcement action against an initial coin offering, saying a Canadian company violated US securities laws in raising $15m through this new, red-hot area of finance.
Charges against the company, described by the agency as a "scam" run by a "recidivist Canadian securities law violator," were brought by the SEC's new cyber unit as it looks to crack down on potential abuse in the cryptocurrency arena.
The SEC alleged that PlexCorps violated securities laws by marketing and selling up to $15m worth of cryptocurrencies, also called PlexCoins, to investors in the US and elsewhere. The commission also charged Dominic Lacroix and Sabrina Paradis-Royer, the company's founders, in connection with the sale.
"Full-fledged cyber scam"
The SEC said it had obtained an emergency court order to freeze the assets of PlexCorps and the two individuals.
In July, the Financial Markets Administrative Tribunal of Quebec banned PlexCorps and Lacroix from all investment-related activities targeted at Quebec residents. In October, Quebec's Superior Court declared the company and Lacroix in contempt of court, finding the defendants continued to market and solicit investments in PlexCorps.