Quebec Enforces Law Against PlexCoin

Quebec Enforces Law Against PlexCoin

The Autorité des marchés financiers (AMF), Quebec’s financial regulator in Canada, has taken an aggressive stance against people and groups who are involved in the promotion of PlexCoin, which is a virtual currency like Bitcoin.

The AMF’s recent exploits show the resolve of the agency against promoters of unbacked cryptocurrencies that do not adhere to Quebec’s financial security laws.

PlexCoin asserts that it is also a decentralized, open source worldwide currency that has value based on the current market movements. It also says that compared to Bitcoin that needs 45 minutes to process, the transactions done via PlexCoin are faster by 15 minutes. The cryptocurrency also claims to have increased storage efficiency.

PlexCoin has no proven real market value yet compared to Bitcoin because the latter is still in its pre-sale days. According to the information presented by FXCM, Bitcoin is currently settling at around $4,100, which is roughly a 300% increase from its 2013 year-end price. Hundreds of thousands of retailers and online merchants are now accepting Bitcoin as a method of payment along with cash, credit card, and cheques.

Before the pre-sale, however, the AMF already obtained an ex parte orders from Quebec’s Financial Markets Administrative Tribunal (FMAT) against some companies and individuals that promote PlexCoin. The FMAT’s prohibitions include the way the targets trade any form of investment, including soliciting investors in Québec and the solicitation of investors outside the province. The targets must also take down any advertisement or solicitations on the Internet related to securities, which includes the shutting down of the PlexCoin websites or, alternatively, making the websites inaccessible to Québec residents. The targets must also post the order on PlexCoin websites, and shut down social media accounts related to the cryptocurrency.

The financial regulators are worried that promoters are not complying with the applicable securities laws. Like the SEC’s notices against token sales and ICOs, the AMF’s notices reveal a high level of concern with individuals who participate in such sales without fully understanding the risks.

Luis Millán, one of the most popular business and legal journalists in Quebec, asserts that the AMF recently raided PlexCoin’s Quebec City offices. The AMF is now thinking about whether to start penal proceedings in the Court of Quebec or refer the case to the police. Millán was able to grab a copy of the filing of the AMF with the FMAT, which he says started with an anonymous tip about PlexCoin in July 2017. In the filing, the AMF said before FMAT that PlexCoin was an investment contract that is legal under the Québec Securities Act, and that the entities behind PlexCoin were not seen to be associated in any jurisdiction.

Millan also said that the AMF is currently in talks about completely shutting down PlexCoin’s social media sites.

Despite the legal steps taken by the AMF, PlexCoin’s executives did not comply with FMAT’s orders, and the cryptocurrency remains operational. It was also able to raise millions of dollars in just a short amount of time from investors.

Categories: Business

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