Victor Ugochukwu · Oct 27, 2020 . 6min read
Payment processor Stripe agrees to pay $120,000 fine for allegedly allowing PlexCoin ICO fraud
AG of Massachusetts claims that the lack of Stripe's risk monitoring and fraud prevention practices led to the PlexCoin ICO Fraud.
By Victor Ugochukwu · Sep 21, 2020 . 5min read
Stripe, a US-based payment processor has agreed to pay a fine of $120,000 for allowing the operators of PlexCoin ICO to use their platform to receive proceeds of the illegal coin offering, thereby defrauding citizens.
The Attorney General of Boston Massachusetts advocated in a recent press release AG of Massachusetts claims that Stripe’s risk monitoring, fraud prevention and mitigation practices violated the state’s consumer protection law.
PlexCoin was an ICO which occurred in August 2017and continued through October 2017. The masterminds behind the ICO were Dominic Lacroix, Yan Ouellet and Sabrina Paradis-Royer. They were all Quebec residents. They raised about $8 million during the period of which 22 investors in Massachusetts participated.
According to the AG office,
Stripe knew or should have known of Lacroix’s fraud in time to prevent harm to Massachusetts consumers, but failed to do so due to its inadequate risk monitoring and fraud prevention and mitigation practices and procedures.
Hence it slammed Stripe for allowing the PlexCoin ICO to thrive on its platform. It said further in its statement,
Today’s settlement also requires security protocols to protect Stripe’s customers in the future as well as regular trainings for employees regarding risk monitoring and fraud prevention.
More heads still rolling since the ICO boom of 2017, PlexCoin and the Stripe Saga won’t be the end.
The ICO boom of 2017 saw the entire cryptocurrency industry raising as much as $6.8 billion at its peak in 2018. Since then, it has slowed down and even saw the industry contract in growth up until the DeFi Bull Run. Since then, we have witnessed SEC and other regulatory agencies clamp down on many of the ICO projects. Many have paid some fines while others were forced to shut down entirely.
With the regulator fining Stripe, the latter may become very strict with crypto transactions going forward. However, we have seen both VISA and Mastercard turning favourable to crypto and digital assets in 2020.
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Victor Ugochukwu · Oct 26, 2020 . 5min read