Virtual chaos

4 December 2017 By Tom Buerkle, Gina Chon Follow @tombuerkle

The SEC has taken its first action against a coin offering, alleging the perpetrators fraudulently raised $15 mln. The CFTC, though, just gave the green light to bitcoin futures. The growing regulatory discord on virtual currencies increases the risks to investors.

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The Securities and Exchange Commission said on Dec. 4 it obtained an emergency asset freeze to stop an initial coin offering that has raised up to $15 million from investors since August by falsely promising investors a 13-fold profit in less than a month. The agency also charged PlexCorp, the issuer of the PlexCoin offering, along with senior executive Dominic Lacroix and his partner, Sabrina Paradis-Royer, of making false statements, making a fraudulent and unregistered offer of securities, and using the proceeds of the ICO to fund their home-decorating projects.

The charges were the first filed by the agency’s cyber unit, which was created in September to police ICOs, distributed-ledger technology, hacking, threats to trading platforms and the spread of false information through social media.

On Dec. 1, CME Group announced it would launch a bitcoin futures contract on Dec. 18 after discussions with the Commodity Futures Trading Commission.

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