New York Businessman Charged with Fraud in Connection with Two ICOs

According to the Eastern District of New York’s Department of Justice, Maksim Zaslavskiy of Brooklyn was recently charged with “securities fraud conspiracy in connection with engaging in illegal unregistered securities offerings”. The charges come just a few days after the SEC initially busted Zaslavskiy.

The “securities offerings” were two separate ICOs that were conducted through two of Zaslavskiy’s companies: RECoin Group Foundation, LLC., and DRC World, Inc. Zaslavskiy branded RECoin as “The First Ever Cryptocurrency Backed by Real Estate”; the 'DRC' in DRC World stood for “Diamond Reserve Club”, and the DRC cryptocurrency was supposedly “hedged” by diamonds.

ICOs Were All Talk, Absolutely No Substance

However, there were no diamonds, and there was no real estate. Zaslavskiy was arrested on Wednesday, November 1st, and appeared before United States Magistrate Judge Ramon E. Reyes, Jr. On the same day, the United States Securities and Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term Commission filed separate charges against Zaslavskiy.

The charges were announced by Bridget M. Rohde, Acting United States Attorney, and William F. Sweeney, Assistant Director of the New York Field FBI. Said Rohde: “As alleged, Zaslavskiy and his associates enticed investors by promising returns using novel ICOs even though Zaslavskiy knew that no real estate or diamonds were actually backing the investments.”

Sweeney added that the charges were “a reminder that we intend to prosecute those who exploit our markets by engaging in corrupt behavior.”

Crypto schemes are becoming more popular, but governments are catching on

As cryptocurrency moves further and further into the mainstream, there are, of course, more malicious criminals who see an opportunity to steal money from innocent people who are trying to get into the game early. However, the increasing popularity of crypto has also caught the attention of the governments and legal systems of much of the world; in some countries (i.e. China), the good guys can’t even conduct ICOs.

Even without the legal protection of a government, there are some tell-tale signs that a cryptocurrency may be a scam: Zaslavskiy’s ICOs guaranteed eye-popping returns and boasted of teams “lawyers, professionals, brokers, and accountants”. However, there were no actually known employees or collaborators. The old saying rings out clearly, even in the very new world of cryptocurrency: if something sounds too good to be true, it probably is.