Brooklyn Businessman Sentenced to 18 Months’ Imprisonment for Defrauding Investors in Cryptocurrency Initial Coin Offerings
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 conspiracy stemmed from two Initial Coin Offerings (ICOs) – REcoin Group Foundation, LLC (“REcoin”) and DRC World, Inc., also known as Diamond Reserve Club (“Diamond”) – 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, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.
“Zaslavskiy committed an old-fashioned fraud camouflaged as cutting-edge technology,” stated United States Attorney Donoghue. “This Office will continue to investigate and prosecute those who defraud investors, whether involving traditional securities or virtual currency.” Mr. Donoghue extended his grateful appreciation to the Securities and Exchange Commission (SEC), New York Regional Office, for their assistance in this case.
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.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Julia Nestor and Andrey Spektor are in charge of the prosecution.
Brooklyn, New York
E.D.N.Y. Docket No. 17-CR-647 (S-1) (RJD)