Founder of U.S First ICO Fraud Case Pleads Guilty

Wilfred Michael 

Wilfred Michael

Reporter

19 November 2018,
19:29
Founder of U.S First ICO Fraud Case Pleads Guilty

Maksim Zaslavskiy, the mastermind behind the first case of fraudulent ICO in the U.S has told a court in the Eastern District of New York (Brooklyn), that he is guilty of the offense.

He told the court audience according to a Bloomberg report,

“I, along with others, made these false statements to obtain money from investors.”

Marksim added,

“We had not yet purchased any real estate, and we had not purchased any diamonds.”

The fraudulent ICO founder and his project team lured over 1000 investors into putting money in two ICO projects, ReCoin and Diamond Reserve Coin, under the impression that both coins were being backed by Real Estate and Diamonds respectively.

It turned out that no backing in the commodities was secured for the coins, whose value crashed in 2017.

New York Court To Sentence Marksim Case

It was in September 2017 that the U.S SEC charged the project founder and warned members of the public to stop throwing their money into the project.

However, the damage had already been done with Maksim and his team receiving funds from those who have fallen victim to their scheme. The amount involved was not revealed either by the U.S SEC or the latest court session.

With the guilty plea, Maksim is likely to be sentenced to 37 months in prison according to the report but will have to wait until the court hearing resume in April 2019.

This will allow the jury to decide whether to announce the case as “a straightforward scam," or label the coins distributed by Maksim and his team as security tokens. If the latter were to happen, then a new sentence could be announced based on U.S securities law.