Canadian Lawyer InHouse

7 CANADIANLAWYERMAG.COM/INHOUSE SEPTEMBER/OCTOBER 2018 A roundup of legal department news and trends Cyber-scam artist to pay fine in crypto-currency A mid-summer's moment of high drama in a Quebec City courtroom is both a reminder and a warning about the legal and regulatory challenges posed by digital currencies, a Canadian pio - neer in the emerging field of fintech says. It started on July 5, when Superior Court of Quebec Judge Raymond Pronovost granted the request of the province's fi- nancial regulator, the Autorité des marchés financiers, and appointed a receiver with powers to take possession of bitcoins be- longing to disgraced Montreal business- man Dominic Lacroix. Lacroix was sentenced to two months in jail and a $10,000 fine in December for fleecing investors from around the world of nearly $15 million in a crypto-currency scam that made international headlines. The money came from an initial coin of - fering — or ICO — that Lacroix launched on social media in August 2017 to fund a digital token startup called PlexCoin. The ICO promised lucrative returns, saying PlexCoin would soon rival Bitcoin thanks to its team of digital currency experts. According to both the AMF, which or - dered Lacroix to stop the ICO before the launch, and the U.S. Securities and Ex- change Commission, which filed a claim against PlexCoin, Lacroix and his partner Sabrina Paradis-Royer in November, the claims were bogus. The SEC succinctly coined Plexcoin "a full-fledged cyber scam." In imposing the maximum fine on La - croix and Paradis-Royer and granting ap- proval for U.S. and Canadian regulators to freeze the defendants' assets, Quebec Superior Court Judge Marc Lesage told the defendants that their "greed at the expense of investors who are promised unmatched interest rates remained (your) only goal." After denying there was any residual value in PlexCoin, the defendants used the cyber-currency to buy luxury cars in Mon - treal this spring and ended up back in court. On July 5, Pronovost ordered Lacroix to turn over 420 PlexCoin tokens — the John practised at Fraser & Beatty (now Dentons) and served as in-house counsel with Gennum, IMAX, and AT&T. © 2018 Thomson Reuters Canada Limited 00250QW-91913-CE OUR QUALITY STARTS WITH OUR PEOPLE Now his job is to make you better at yours. Practical Law Canada provides legal know-how that gives lawyers a better starting point. Our expert team of lawyer-editors creates and maintains thousands of up-to-date, practical resources across all major practice areas. We go beyond primary law and traditional legal research to give you the resources needed to practise more effi ciently, improve client services, and add more value. REQUEST A FREE TRIAL TODAY 1-844-717-4488 | thomsonreuters.ca/practicallawcanada Untitled-4 1 2018-08-16 12:36 PM

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