ICO = the demise of all sensibility. The illustrious rise and fall of former institutional developer and trader Maksim Zaslavskiy

An ICO fraudster and his companies have been selling unregistered securities, and the digital tokens or coins being peddled don’t really exist. Really? Yes. The sky is also blue and water is wet. We look at how individuals who start their careers properly can also fall foul of ICO-mania and why it is proper practice to stay well away.

Ever since what can only be described as an epidemic in which fully grown adults are metaphorically foaming at the mouth and clambering over themselves to be part of anything at all that involves the buzzword ‘crypto’ or the acronym ‘ICO’ began, FinanceFeeds has maintained a steadfast notion that any participation by any entity in coin offerings is disingenuous.

Indeed, it is clear to most professionals in the electronic trading sector that the current wave of overly publicized crypto and ICO pipe dreams that rarely demonstrate any substance beyond the overtly flamboyant PR.

It is clear that the vast majority of bandwagonists in the ICO field, as well as those embarking on new and mysterious cryptocurrency ventures that involve using digital currencies as an investment or pseudo venture capital orientated vehicle for fraud are the work of the metamorphosis from binary options by platform companies and market makers that have spent a decade fraudulently selling a completely weighted gambling product to unsuspecting customers who thought that they were trading the financial markets.

The market makers and their associated brands, some of which have received visits from the FBI during raids on offices in Israel recently, have simply shifted their product name to ICO instead of binary options, with intent to continue to steal from people who think they are investing in a new and lucrative market or product.

There is, however, a more concerning dynamic with regard to the ICO fever that has taken hold like narcotics in a penitentiary center, that being the temptation to engage in such activity having extended past the back streets of Ramat Gan and its semi-literate inhabitants of which this behavior can perhaps be expected, and into the realms of those who started their careers with a good education, followed by institutional and interbank computer science or trading related positions, only to fall into trouble with the law after getting involved with ICOs and then defrauding customers.

A very interesting case last year made its way into the public arena, that being the appearance in court by Maksim Zaslavskiy, a well dressed, well educated professional from New York, who pleaded not guilty to ICO fraud On December 1st last year, Mr Zaslavskiy pleaded not guilty to defrauding investors in two ICOs following having been charged with conspiracy to commit securities fraud in October. Following his court appearance, Mr Zaslavskiy secured a $250,000 bail requirement with a Brooklyn-based property as collateral.

This may appear the same as any other run of the mill ICO case, and is likely to be the fate awaiting the aforementioned back street former binary options fraudsters that have yet to be caught and prosecuted, however Mr Zaslavskiy hails from a different commercial background.

Mr Zaslavskiy, raised in middle class Flushing, New York, began his career as an IT consultant in 1998, focusing on providing services to the interbank sector, having worked with Swiss Bank, Merrill Lynch and UBS for several years.

In 2002, he began studying for a Masters degree from the prestigious Baruch College, at the Zicklin School of Business faculty, following which he joined Worldco as an equity trader in 2003.

Mr Zaslavskiy moved on to Schonfeld Securities, where he traded equities, whilst completing his Masters degree, after which he attended Yeshiva University and obtained a further Masters degree from the Benjamin N Cardozo School of Law.

All was going well, and Mr Zaslavskiy had followed the traditional path (that myself and many of my close friends and peers followed – Ed) to obtain a professional standing in the institutional technology sector of the financial services industry at interbank level.

However, in 2011, Mr Zaslavskiy had two judgments served for non payment, amounting to a total of $11,957, which is not an inconsiderable amount for a young man who is continuing to invest in building his career.

In 2015, Mr Zaslavskiy was made personally bankrupt under Chapter 7 whilst residing at a residential address in Brooklyn, New York.

Records on Mr Zaslavskiy’s company Atlas Resources of which he was a Director, show him as being of ‘good standing’ and whilst bankrupt people are not allowed to run companies as directors, Mr Zaslavskiy began exploring the ICO route.

In the advent of his bankruptcy, Mr Zaslavskiy became a property manager at Alliance Real Estate in 2013.

In July last year, however, Mr Zaslavskiy witnessed his perceived elevation from that of a discharged bankrupt who had worked very hard through two difficult degrees and an institutional technology career in banks, which requires concentration, dedication and is highly competitive, to being revered as the first person to have launched a property related ICO.

His new company, RECoin, came with the glitzy reputation of being based in Las Vegas, and was the antithesis of the plate glass, suit jacket-on-chair culture of wage-hungry corporate New York.

At the time, the ICO was set to go live on August 7, 2017 and marketers had described Mr Zaslavskiy as a real estate guru’ despite his banking and software development background and just a one year position as an employee of a property company.

Mr Zaslavskiy announced that the crowdsale process woud include both pre-token sale and an official ICO fundraising campaign, with REcoin being positioned in terms of marketing as a new proprietary cryptocurrency designed for a broad range of financial transactions and backed by the real estate held by the 101REcoin Trust, which includes the real estate in developed and stable economies like the USA, Canada, Japan, Great Britain and Switzerland.

PR at the time made very dubious claims that there were several economic and technical measures in place that makes REcoin attractive as a means of payment for real estate transactions. These technical measures are going to be carefully managed, tracked and authenticated through blockchain technology.  Yes. And I’m a hobgoblin.

Just one month after launch, the SEC charged Mr Zaslavskiy, alleging that he and his companies have been selling unregistered securities, and the digital tokens or coins being peddled don’t really exist.

Therein lies the point. FinanceFeeds maintains that in most cases, digital tokens being peddled do not exist, and that they never will, hence we are aligned with the SEC’s view on ICOs.

According to the SEC’s complaint, investors in REcoin Group Foundation and DRC World (also known as Diamond Reserve Club) have been told they can expect sizeable returns from the companies’ operations when neither has any real operations.

None ever have any real operations. It is simply a marketing exercise to steal money. There is very rarely any intent to provide any return on investment, and rarely any intent to put the item that is being funded into production.

We rest our case, however this fall from grace shows exactly how addictive the ICO world is, and that in itself should be reason enough to stay well clear.

FinanceFeeds will remain firm in this and will continue to represent the highly established and well renowned FX companies, financial institutions, technology providers and infrastructure firms in major, well recognized regions.

 

 

 

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