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On November 15, 2018, Bloomberg reported that Maksim Zaslavskiy, the defendant in the first case of fraud concerning the first offers of coins (ICO), pleaded guilty. The case is United States v Zaslavskiy (1: 17-cr-00647), United States District Court, Eastern District of New York.
Zaslavskiy was accused in November 2017 of three charges of fraud in relation to two Ico: "REcoin" and Diamond Reserve Coin (DRC). The Department of Justice (DOJ) said that Zaslavskiy had lied to investors by selling these two criptoassets. According to the indictment, he told investors that both were backed by real-world assets: real estate in the case of REcoin and diamonds in the case of the DRC.
In February 2018, Zaslavskiy's legal team filed a motion to close the case on the grounds that (a) he had not committed securities fraud because REcoin and RDC were not securities; and (b) the securities laws are so vague that it would be unreasonable to expect an ordinary person to know that his alleged conduct was illegal.
As foreseen by CryptoGlobe, on September 11, 2018, the court rejected this motion, with the judge stating that, assuming that all DOJ allegations are true, REcoin and DRC are securities and securities laws are not so vague to be unconstitutional. This meant that the case would go to trial.
The Bloomberg report says that Zaslavskiy told the federal court: "I, together with others, have made these false statements to obtain money from investors". Regarding REcoin, according to reports, said: "We had not yet purchased any property". And apparently, as regards the DRC, he admitted: "We had not bought diamonds".
On April 19, 2018, when Zaslavskiy is again in court for the sentence, he risks up to 37 months in prison.
Mildred Whalen, principal attorney for the defendant, said after the hearing:
"This is a case in which he had a faith in good faith in his cryptocurrency products, but he commercialized it as further compared to what had actually been developed".
Featured image Credit: photos via Pexels.com
