Post by congregatio on Oct 18, 2017 0:55:27 GMT 4
In a federal complaint, the SEC alleges that Maksim Zaslavskiy and his companies, REcoin Group Foundation (REcoin) and Diamond Reserve Club World (DRC), duped investors into purchasing unregulated securities in the form of digital tokens that were backed by fictitious assets. The alleged stated purpose of each ICO was to generate returns from (i) the appreciation in value of the investments each company would make in real estate (in the case of REcoin) or diamonds (in the case of DRC) and (ii) the appreciation in value of the digital tokens themselves – including one touted as "The First Ever Cryptocurrency Backed by Real Estate" – as the companies' businesses grew and/or the demand for such tokens increased. The complaint contends that the ICOs were purportedly styled as "Initial Membership Offerings" in an attempt to circumvent the federal securities laws, but the membership interests that were being offered to investors were "in all material respects identical to the ownership attributes of purchasing the purported 'tokens' or 'coins' and are securities within the meaning of the securities laws."
According to the SEC, the defendants made false promises that suggested the two companies would have sizable returns, even as neither had "any real operations." For example, while the companies were touted as having "expert" management teams, neither had "hired or consulted any lawyers, brokers, accountants, developers, or other professionals to facilitate its investments." The complaint further asserts that investors in the ICOs received nothing in return for their investments because the companies lacked sufficient technological expertise to create and deliver digital tokens. Based on these and other allegations, the SEC obtained an emergency order to freeze the defendants' assets.
According to the SEC, the defendants made false promises that suggested the two companies would have sizable returns, even as neither had "any real operations." For example, while the companies were touted as having "expert" management teams, neither had "hired or consulted any lawyers, brokers, accountants, developers, or other professionals to facilitate its investments." The complaint further asserts that investors in the ICOs received nothing in return for their investments because the companies lacked sufficient technological expertise to create and deliver digital tokens. Based on these and other allegations, the SEC obtained an emergency order to freeze the defendants' assets.