Cryptocurrency Promoter Charged With Securities Fraud

handcuffs and diamonds

(Bloomberg)–A businessman who claimed to be launching the “first ever cryptocurrency backed by real estate” and another digital currency supposedly backed by diamonds was arrested on securities fraud conspiracy charges.

Maksim Zaslavskiy is accused of deceiving investors in the initial coin offerings by his companies REcoin Group Foundation LLC and DRC World Inc., also known as Diamond Reserve Club, according to a complaint unsealed Wednesday in federal court in Brooklyn, New York.

Zaslaviskiy and his associates promised returns using novel coin offerings despite knowing “that no real estate or diamonds were actually backing the investments,” Acting U.S. Attorney Bridget M. Rohde said a statement.

Last month, Zaslavskiy was sued by the U.S. Securities and Exchange Commission over the same allegations. The case is among the first to be brought by the regulator over fraud in initial coin offerings, or ICO’s. The SEC began alerting investors of such scams in July, amid the hype associated with soaring values of bitcoin and interest in other cryptocurrencies.

The case is U.S. v. Zaslavskiy, 1:17-mj-00934, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Christie Smythe in Brooklyn at [email protected] To contact the editors responsible for this story: David Glovin at [email protected] Joe Schneider


© 2017 Bloomberg L.P

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