The US Securities and Exchange Commission said Monday its newly-created Cyber Unit shut down a digital currency investment scam, charging a company that took millions from investors, "falsely promising" a speedy, 13-fold profit.

The SEC's Cyber Unit filed charges against and froze the assets of Dominic Lacroix, a Canadian with a history of securities law violations, and his company PlexCorps in an initial coin offering fraud.
Using Facebook, the company sold securities called PlexCoin -- that its website billed as "the next cryptocurrency" -- to investors in the US and elsewhere, raising $15 million since August, and promising a return of 1,354 percent within 29 days, the SEC said in a statement.

These were the first charges filed by the unit the SEC created in September to focus on fraudulent initial coin offerings of digital currency and other crimes.

"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," the unit's chief Robert Cohen said in a statement. "We acted quickly to protect retail investors from this initial coin offering's false promises."

The SEC won an emergency court order to freeze the assets of PlexCorps, Lacroix, 35, and his partner Sabrina Paradis-Royer, 26, accusing them of trading in unregistered securities.

PlexCorps promotional materials claimed the company's executives could not be identified for security and privacy reasons when in reality this was because Lacroix had already been pursued by Canadian authorities for securities law violations, the agency said.

The SEC's move comes amid mounting interest in digital currencies, with the most well-established, bitcoin, seeing its value soar this year to dizzying heights, attracting both investor interest and skepticism.

The US Commodities Futures Trading Commission, which regulates trade in derivatives, last week cleared the way for mainstream exchanges, including the CME Group and Cboe Futures Exchange, to offer contracts for futures of the virtual currency.

Cboe was the first out of the gate Monday, announcing it would launch bitcoin futures trading beginning Sunday. CME plans to allow trading in bitcoin futures later this month.

Source:AFP