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Crypto swindler faces five years in prison for defrauding over 1,000 investors

18 Nov, 2018
by Richard Allen
News
Crypto swindler faces five years in prison for defrauding over 1,000 investors

A Brooklyn man faces up to five years in prison after he pleaded guilty to conspiracy to commit securities fraud when he orchestrated the sale of phony ICOs last year, Finance Feeds reports.

Maksim Zaslavskiy confessed to defrauding “about” 1,000 investors through the sale of REcoin, branded as the first ever cryptocurrency to be backed by real estate. He also sold Diamond which he stated were hedged by actual diamonds. Zaslavskiy owned neither real estate nor diamonds.

Zaslavskiy also stated that REcoin had a “team of lawyers, professionals, brokers and accountants” who would invest the proceeds from the REcoin ICO into real estate. Furthermore, he claimed that 2.8 million tokens had already been sold, even though only around 1,000 investors bought REcoin tokens.

FBI Director-in-Charge Sweeney stated that “Zaslavskiy and his associates cloaked old-fashioned criminal schemes in the language of new currency in order to take advantage of investors.”

“Simply labeling an investment opportunity as ‘virtual currency’ or ‘cryptocurrency’ does not transform an investment contract—a security—into a currency,” the court stated.

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