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Daily fraud update: 4th October


HitBTC “hits” back with accusation of evidence forgery

A well-known global currency exchange has been accused of blocking a user’s account – and has accused the account’s holder of creating fake evidence.

In a peculiar case which has played out largely on social media, Atlas Quantum said that the exchange had blocked its accounts.

Atlas Quantum is an investment company based in Brazil, and it went so far as to create a video detailing the allegations – which it published in mid-September.

In this video, it claimed that HitBTC had frozen almost 1,900 bitcoins in its account – an amount worth close to $15.3m.

It also said that more than $5.4m worth of the stablecoin Tether had also been frozen.

However, HitBTC has denied this – and posted on social networking site Twitter to say that it was unable to ascertain that the image Atlas Quantum posted were real.

“We cannot confirm the recently published claims by Atlas Quantum regarding HitBTC, as we don’t have any blocked accounts with equal or similar balance”, it said in a statement.

“Moreover, we haven’t received any official request for assistance from Atlas Quantum team by now.”

“Moreover, the HitBTC interface in the video has been forged”, it added.

Atlas Quantum has now removed its complaint, leaving many in the dark as to exactly what has taken place.

The Brazilian arm of online crypto magazine Cointelegraph said that it had approached the investment firm for a comment but had not received any response.

SEC levies enforcement action against ICO provider

A provider of a cryptocurrency initial coin offering (ICO) has been hit with a fine of $7m by a regulator.

The Securities and Exchange Commission (SEC) said that it was ordering PlexCorps to pay out $7m.

It also said that it was going to ban one of the people who began the firm from serving in an official capacity at a publicly traded firm.

In a statement, the SEC alleged that PlexCorps had told a number of lies in its public-facing materials.

In particular, it said that “misrepresentations about the size and scale of PlexCorps’ operations, the use of funds raised in the PlexCoin ICO, and the amount of funds raised in the PlexCoin ICO” had all occurred.

As part of the moves against the firm, the SEC successfully persuaded the US District Court for the Eastern District of New York to levy disgorgements of $4,563,468 on the company.

The company was also told it had to pay $348,145 in prejudgment interest.

The two owners of the firm, Dominic Lacroix and Sabrina Paradis-Royer have been hit with enormous civil penalties of $1m each.

They will also now have to give over $4m which they managed to solicit from traders who participated in their firm’s ICO.