A computer programmer from Brooklyn and the first person in U.S to be guilty of running a deceitful Initial Coin Offering (ICO), Maksim Zaslavskiy, has been sentenced to one year and half behind bars.
On November 18,the Brooklyn entrepreneur received a jail sentence of eighteen months for running two scam ICO’s, which were advertised as being backed by collaterals – diamonds and property(real estate) that did not exist. Zaslavskiy pleaded guilty in November 2018 in conspiracy to commit securities fraud as reported by Law360.
Mildred Whalen of the Federal Defenders of New York,Zaslavskiy’s attorney had argued to federal Judge Raymond Dearie that Zaslavskiy attempt to refund the duped investors according to Drain’s New York Business.
However, Paypal reportedly froze his accounts over considerations that ICO payments were created of made with purloined or deceitful credits cards.
When Zaslavisky told the federal Judge that “at no point I am a thief”,Dearie replied,” You are a thief, You took something that didn’t belong to you under false pretenses”,adding:
“This is a very unusual case for a lot of reasons. it involves new technologies and new currencies. But there is nothing new about lying or flagrant fraud”.
Zaslaviskiy made it appear as if the ICO was controlled/led by fully fledged property professionals, backed by United States property investments, luring in more than 1,00 investors who gave at least $300,000 in the scam ICO during 2017 summer. United States attorney for the Western District of New York, Richard P. Donoghue said in a statement:
“Zaslavskiy committed n old- fashioned fraud camouflaged as cutting-edge technology.[…] This office will continue to investigate and prosecute those who defraud investors, whether involving traditional securities or virtual currencies”.