Report: The first ICO crypto token fraud ended in a guilty plea
Reportedly, the first case of a fraud related to the ICO ended in a guilty justification when a New Yorker accepted the fact that he lied to nearly 1000 people. MaksimZaslavskiy who is 39 years old, stated that he wanted to raise the funds for the two ICO’s.
These ICO’s were supported by the investments made in real estate and diamonds. Nevertheless, these assets never existed and it was entirely a fraud. He further stated that he and his fellow mates made the false claims to get money from the investors in the court in Brooklyn, New York.
Zaslavskiy said that he deceived the investors by advertising the REcoin ICO that was supported by the real estate investments in the developed countries. He promised the investors that they will get huge returns by investing in the ICO as per the prosecutors in Brooklyn.
Later on, in the same year, he started marketing a blockchain-based Diamond Reserve Coin (DRC) which he affirmed that it is a freshly developed cryptocurrency that is backed up the physical diamonds.
Federal regulators stated in the lawsuit that it was an old-fashioned scam carried out in a new way. The lawyers of Zaslavskiy debated that the securities laws do not administer the cryptocurrencies and requested the judge to chuck the case out.
Raymond Dearie-U.S District Judge passed the government a win when he stated “Congress aim in legislating the securities laws was to administer the investments, in any form they are made and whatever name they carry” and said that the accusation charges a straightforward fraud.
Previously in this month, the attorneys registered a revised accusation against Zaslavskiy, adding a charge of a counterplot to commit wire scam, which carries a prison term for the maximum of 20 years.
“Public judges in Brooklyn, NY are set to rule on the query. By doing this, they could identify whether Bitcoin and other stateless currencies are the assets that can be administered and regulated like the stocks and bonds.”
A parallel case was also registered against Zaslavskiy due to which the SEC sued him. Zaslavsiky told the authorities to put a hold on the case until the previous criminal case is resolved.