- A brand new unit of the Securities and Exchange Commission has shutdown an initial coin offering scam.
- This is the first case filed by the new cyber unit, created in September to focus on nefarious activity in the world of crypto.
US regulators appear to be paying more attention to the opaque world of initial coin offerings.
The Securities and Exchange Commission announced Monday it halted a fraudulent ICO “falsely promising” over 1,000% returns. The regulator said this was the first case filed by its brand-new cybersecurity unit, aptly named Cyber Unit.
Initial coin offerings, the red-hot cryptocurrency-based fundraising method, have raised more than $US3 billion this year by some estimates. They have come under the scrutiny of regulators across the world because they allow young companies to raise quick money without, in some cases, having to disclose proper information to investors.
As for Monday’s case, the SEC filed charges against Dominic Lacroix and his firm PlexCorps for soliciting $US15 million from thousands of investors.
“The Commission’s complaint, filed in federal court in Brooklyn, New York, alleges that Lacroix and PlexCorps marketed and sold securities called PlexCoin on the internet to investors in the U.S. and elsewhere, claiming that investments in PlexCoin would yield a 1,354 per cent profit in less than 29 days,” the regulator said in a statement.
The Cyber Unit, according to the SEC, was created with the purpose of sniffing out nefarious activity in the crypto and initial coin offering space.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.