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SEC halts initial coin offering, calling it fraud

Tammy Whitehouse | December 5, 2017

Companies can expect no new guidance from the Securities and Exchange Commission anytime soon on digital currencies, but they can expect its enforcement arm to act if it sees indications of fraud.

The SEC obtained an emergency asset freeze to halt what it identified as an initial coin offering fraud, which raised up to $15 million from thousands of investors since August promising 13-fold profit on the sale of a security called “PlexCoin.” The SEC filed charges PlexCorps, Dominic Lacroix, and Sabrina Paradis-Royer, claiming the offering was a scam.

The action is the first by the SEC’s newly formed Cyber Unit, established to get on top of swift technological developments establishing new electronic trading platforms. Distributed ledger technology, or blockchain, is akin... To get the full story, subscribe now.