ICO Scammer from Brooklyn Maksim Zaslavskiy managed to run two fraudulent ICO projects and he was jailed for a year and a half which made the case one of the first ones to apply federal securities law on cryptocurrency. Let’s find out more in the cryptocurrency news below.
While the United States still doesn’t have a decent regulation framework regarding cryptocurrencies, the fraudulent ICOs are something easier to deal with especially because of the fact that many of the tokens are considered securities. One of the cases was closed yesterday when an ICO scammer from Brooklyn, the businessman Maksim Zaslavskiy, got a prison sentence for a year and a half. Zaslavskiy held two fraudulent token sales back in November 2018 when he sold securities and he admitted to the authorities when he was caught. He also admitted to falsely claiming that his tokens, ReCoin, and Diamond Reserve Club were backed by real estate and diamonds.
According to the US attorney for New York’s Eastern District, Richard P. Donoghue, the Zaslavskiy committed a very old-fashioned fraud. However, he was quite innovative to mask the fraud and make it seem like a more advanced cutting-edge technology. What this means for Zaslavskiy sold tokens that didn’t really exist and intentionally tricking the investors into throwing away the money for the supposed coins. The conspiracy charges were raised against him in 2017 and he tried to fight them off until 2018 when he tried to dismiss the case.
He claimed that he didn’t market his ICO tokens as securities which means that the case does not fall under the securities fraud laws. At that time, the court decided that the jury will have to determine whether the coin offerings were in fact securities, or not. Before this happened, Zaslavskiy decided to make a deal and plead guilty and as a part of the plea deal, he agreed not to appeal to a lower sentence than three years and five months. He was also ordered to return some of the money to the investors who participated in the token sales although the court did not determine the exact amount as of now.
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