Dominic Lacroix, the founder of PlexCoin, was forced to transfer BTC 420 worth USD 3.2 million to court administrators at the Palace of Justice in Quebec, Canada. Refusing to do so would have resulted in him being held in contempt of court and sent to jail.

Originally, the judge ordered that Lacroix make the transfer from home and come into court a day later to confirm the transfer. When he showed up at court, he still hadn’t made the Bitcoin transfer, saying that his computers had been seized which made it very complex to complete the transfer. The provisional administrator that has been assigned control of Lacroix’s assets asserted that the Bitcoins could be easily transferred, and the judge had a computer rolled into the courtroom. Under the threat of being locked up, Lacroix was able to send the Bitcoins to the administrator. This might be the first time in history that Bitcoins have been transferred in a courtroom like this.

PlexCoin had some success during its initial coin offering (ICO), raising USD 15 million, but ended up never releasing the cryptocurrency because regulators intervened in December 2017. The Quebec Autorite des Marches Financiers (AMF) and the United States Securities and Exchange Commission (SEC) came down heavily on Lacroix since he broke securities laws. The SEC has recently clarified that practically all ICOs are considered securities and must get SEC approval or face harsh penalties; the PlexCoin case occurred months before this clarification, however. Perhaps PlexCoin was targeted because its founder had a previous charge from 2013 of misleading investors.

Lacroix has been accused by the SEC of laundering the money from the ICO using secret accounts; this occurred after the SEC and AMF cracked down on PlexCoin. The SEC obtained an additional emergency court order on 18 June 2017 to freeze all of his assets to prevent further laundering. Of course, a court order cannot freeze cryptocurrency assets held in proper cryptocurrency wallets, but it seems the Palace of Justice in Quebec has solved that problem by getting Lacroix into the courtroom and threatening him with jail time.

The PlexCoin case is part of a growing crackdown on ICOs. The President of the CBOE says the ICO reckoning will come in two waves. First, the SEC will sue all the ICOs, and then people involved in the ICOs will sue each other, which could result in a total collapse of price for cryptocurrencies launched via ICO.

 

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