SEC’s Cyber Unit files first charges against digital coin scam

The Securities and Exchange Commission’s (SEC) new Cyber Unit filed its first charges against a digital currency fraud that had already amassed $15 million from investors.

On Monday, the SEC’s unit took emergency action against Dominic Lacroix, and his company, PlexCorps who were issuing digital tokens as a part of an “initial coin offering” (ICO) scheme, according to a press release. Lacroix promised that investments in his digital currency would yield an explosive 1,354 percent profit in just under a month.

The SEC’s review found this false and immediately shut down Lacroix’s operation, which had been operating since August.

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“This first Cyber Unit case hits all of the characteristics of a full-fledged cyber scam and is exactly the kind of misconduct the unit will be pursuing,” said Robert Cohen, chief of the Cyber Unit, according to the release. “We acted quickly to protect retail investors from this initial coin offering’s false promises.”

The unit was created in September to focus on fraud and abuse in the digital currency and initial coin offering space, as well as mitigate the spread of fake information on the internet and the hacking of trading platforms.

Though these are the first charges leveled by the Cyber Unit, the SEC has been taking steps to stop ICO scams. In October, it filed charges alleging that Maksim Zaslavskiy had also run a multimillion dollar ICO scam.

Zaslavskiy and Lacroix appear to be capitalizing on the newfound interest around bitcoin and other digital currencies, which have captured public attention by reaching record values in recent months.

Bitcoin most recently hit a new high of more than $11,000 a coin last week. Ethereum, the second most valuable digital currency in terms of market capitalization, is currently trading near its all-time high of more than $460.

ICO tokens are often built on top of currencies like Ethereum and bitcoin for more specific purposes. One recent token, Filecoin, takes advantage of Ethereum’s technology to create an Airbnb-styled system in which users can rent out spare computer space to others looking for extra digital storage.