US Govt needs additional time to determine restitution in ICO fraud case against Zaslavskiy

Maria Nikolova

The government has been working with the victims and Maksim Zaslavskiy to reach an agreement on the proper restitution amount.

More than three months after Maksim Zaslavskiy got a prison sentence over initial coin offering (ICO) fraud, the questions regarding the proper restitution amount in the criminal case against him remain open.

On February 19, 2020, Judge Raymond J. Dearie of the New York Eastern District Court granted a request by the US Government for additional time to file its restitution submission. The deadline is now extended until May 18, 2020.

In its request, seen by FinanceFeeds, the government says it has been working with the victims and the defendant Maksim Zaslavskiy to reach an agreement on the proper restitution amount. Additional information is necessary in order to accurately determine victim losses, the government explains, as many of the payments in question were made from the victims’ wallets using cryptocurrency, and the process for reconciling the missing funds has taken longer than the government initially anticipated. The defendant consented to the additional time sought to make this determination.

The ICO fraud at the core of these criminal proceedings 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.

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. The Court issued a sentence of 18 months.

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