The newly created cyber unit of US Security and Exchange Commission (SEC) has found its first suspect. PlexCorps’, a crypo related company hosted their ICO this August in which they promised 13-fold profits to their investors. Through this scheme, the PlexCorps ICO was able to gather more than $15 million from thousands of investors from all over the world.

The goal of the newly formed cyber unit is to solely help SEC in ICO and distributed ledger related matters. The decision to form a cyber unit came after scores of investors complained of ICO scams in the market.

One example of such a scam ICO is Confido, which raised $375,000 online and then simply vanished. Another example of a fraudulent ICO is PlexCorps.

Robert Cohen, who is the chief of the SEC’s cyber unit had the following comments regarding their first case:

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

SEC filed charges against the owners of the company, Dominic Lacroix and Sabrina Paradis-Royer. The SEC stated that Lacroix is a recidivist who has a history of breaking security laws. SEC blocked all payments to PlexCorps and froze the assets of the company and its owners.

SEC has, time and again, notified investors that they should carefully invest in ICOs due to their unregulated nature. Currently, very few regulations exist that protect the interests of the investors. In case of any issue, there a very limited chance that any kind of reimbursement will be made to the investors.

Since the ICO market is unregulated, investors cannot go to the courts to settle claims. This leaves the investors in a precarious situation. Incidents such as that of Confido can occur again if the investors are not careful. Some characteristics that should be carefully observed before deciding to invest in an ICO are the following:

ICO should have a professional team behind it.
The blockchain code should be original.
The company should have an online presence for quite some time.
The preceding steps to an ICO should be traceable, that is, the code and development should be evident.

Investors should take care while investing in ICOs. Otherwise, they risk losing their entire investment in a matter of minutes. It might be an attractive market at the moment but it is not 100% safe.

UNLOCK 2020

Start date

End date

Location