Maksim Zaslavskiy gets 18-month prison sentence over ICO fraud

Maria Nikolova

The conspiracy stemmed from two initial coin offerings – REcoin and DRC World, Inc.

Earlier today, in federal court in Brooklyn, Maksim Zaslavskiy was sentenced by United States District Judge Raymond J. Dearie to 18 months’ imprisonment for conspiring to commit securities fraud.

The fraud stemmed from two initial coin offerings (ICOs) – REcoin Group Foundation, LLC and DRC World, Inc., also known as Diamond Reserve Club – which Zaslavskiy and others fraudulently marketed to the public. The amount of restitution will be determined by the Court at a later date.

Richard P. Donoghue, United States Attorney for the Eastern District of New York commented “This Office will continue to investigate and prosecute those who defraud investors, whether involving traditional securities or virtual currency.”

In July 2017, Zaslavskiy marketed RECoin as “The First Ever Cryptocurrency Backed by Real Estate,” and subsequently Diamond as an “exclusive and tokenized membership pool” hedged by diamonds. In reality, Zaslavskiy bought neither real estate nor diamonds, and the certificates he sent to investors were worthless. Zaslavskiy also falsely advertised that REcoin had a “team of lawyers, professionals, brokers and accountants” who would invest the proceeds from the REcoin ICO in real estate, and that 2.8 million REcoin tokens had been sold.

Let’s recall that, as FinanceFeeds reported, the Government had sought a sentence of 30-37 months of imprisonment for Zaslavskiy because the two fraudulent schemes the defendant carried out were significant in nature and scope.

Moreover, the Government noted, even after the Securities and Exchange Commission (SEC) interjected in the defendant’s fraud, he tried to transition into a new fraudulent venture – Diamond. While the name of the ICO changed, the misrepresentations as to Diamond were nearly identical to those regarding Recoin.

Zaslavskiy had argued that while he “exaggerated and made false statements” about Recoin and Diamond, it was all in an effort to get investors to invest in his venture, not to steal or cheat investors.

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