SEC Halts a Silly Initial Coin Offering

“But everyone was on notice that the next time someone launched a cryptocurrency-based investment scheme without even attempting to follow U.S. securities laws, they might get in trouble. Of course by that point many, many, many people had done exactly that, in the form of initial coin offerings, and they kept right on doing it after the SEC report. And so, for the last few months, people who are interested in initial coin offerings, and people who are interested in SEC enforcement actions, have been rather impatiently waiting for the SEC to sue an ICO operator for violating the law. 1 I sit near the center of that Venn diagram, so of course I was pleased to see that yesterday was the day:

The Securities and Exchange Commission today announced it obtained an emergency asset freeze to halt a fast-moving Initial Coin Offering (ICO) fraud that raised up to $15 million from thousands of investors since August by falsely promising a 13-fold profit in less than a month.

The ICO is called “PlexCoin,” 2 and “the SEC’s new Cyber Unit” brought the case, and both of those names are faintly embarrassing. (“SEC: Cyber” would be a pretty good CBS prime-time drama.) Anyway:

“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. “We acted quickly to protect retail investors from this initial coin offering’s false promises.””

Via Bloomberg | read full article here: http://ow.ly/myJ730h3a5w

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