Stripe, the U.S.-based payment processor, moved to resolve allegations this week brought forward by the Massachusetts Attorney General's office in relation to PlexCoin, a fraudulent initial coin offering.
As previously reported, a grand jury indicted three residents of Quebec earlier this summer in connection with PlexCoin, charging them with wire fraud, conspiracy to commit securities fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. Two of the named defendants were ordered last year to pay nearly $7 million in combined fines and penalties after being charged by the Securities and Exchange Commission.
The September 18 statement from the office of Massachusetts AG Maura Healey indicates that Stripe served as a payment processor for PlexCoin at one point, with the AG's office alleging that "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."
"Lacroix allegedly used Stripe accounts as part of the PlexCoin scheme and illegally obtained funds from 22 investors in Massachusetts. Cryptocurrency is cryptocurrency is a digital currency designed as a medium of exchange," the statement said.
A planned $120,000 payment by Stripe resolves the allegations, with an "assurance of discontinuance" document stressing that it represents neither a penalty or a fine.
"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," the AG's office said.