Hi everyone. This **breaking news** article will cover the SEC's announcement that they are filing charges against two fraudulent ICOs, namely _REcoin_ and _DRC_. This continues the SEC's initiative to monitor ICOs outlined in [this article](https://steemit.com/bitcoin/@mooncryption/breaking-news-sec-planning-creation-of-cyber-unit-with-ico-oversight). Let's begin! <center>![](https://steemitimages.com/DQmSnubYwM36dUG1QYZ8xk4ZPxFfVhJqUKjKfqkEBngZyFD/image.png)</center> # Fraudulent ICOs Discovered RECoin and Diamond Reserve Club (DRC) were the ICOs charged, and they were both created by someone named "Maksim Zaslavskiy." Let's dive into each ICO, and see what made the ICOs frauds: ### RECoin: A Real Estate-Backed Coin RECoin's backing was promised to be real estate assets bought by ICO funds. Founder Maksim Zaslavskiy boasted about his team of "lawyers, professionals, brokers and accountants" who would initiate the trades and purchase the assets, however **nobody was hired by Zaslavskiy, and the team did not exist.** <div class="pull-left">https://steemitimages.com/DQmayPJ97o7FzzW287RBjMqAd1nF76EdwqKNn7m49GLpGtE/DQmayPJ97o7FzzW287RBjMqAd1nF76EdwqKNn7m49GLpGtE.jpg</div> Additionally, he greatly inflated the **numbers** behind his ICO. His ICO was estimated to have raised about $300,000, however he told investors it had raised $2-4 million. Both of these lies led to the SEC labeling RECoin as a fraud. ### DRC: A Diamond-Backed Coin DRC, or Diamond Reserve Club's ICO fraud was very similar to that of RECoin. Zaslavskiy told investors that his company had lucrative deals with diamond traders/sellers bringing him large discounts when buying diamonds. He told ICO investors they would make profits off of diamond **arbitrage.** (Arbitrage is when you buy assets at a low price from one seller/exchange and sell them at a higher price at another seller/exchange, or vice-versa. This makes use of the differences/variations between exchanges.) <div class="pull-right">https://steemitimages.com/DQmRrwDsVGXou1YfDHJFAYk4ZdkHDcaHDpgAjphxEbiC5Dg/2016-09-22-1474506901-4241660-Diamond.jpg</div> Just like RECoin, these deals had not been made; DRC had not done business with any diamond sellers, and the coin was not backed. The exact amount investors lost when investing in DRC is not known, but is estimated to be quite high. # SEC Shows Seriousness Regarding ICOs The SEC's recent warnings regarding fraudulent usage of cryptocurrencies and ICOs has now been met with hard evidence that the SEC is serious about this. The SEC's statement regarding these ICOs is shown below: > Investors should be wary of companies touting ICOs as a way to generate outsized returns. As alleged in our complaint, Zaslavskiy lured investors with false promises of sizeable returns from novel technology. <br> —**SEC** <div class="pull-left">https://steemitimages.com/DQmTzZZ6HtddtXhsmA5a5d29zMMbjuJRRT1B7MoS9kFe3sq/image.png</div> The SEC is currently in the process of obtaining court orders and charges to bar Zaslavskiy from directing any future ICOs and freeze his assets. They are also working on repaying investors. Lastly, it seems the SEC is using Zaslavskiy's scam as a message to all perpetrators of ICO scams and frauds to think again. The SEC isn't kidding about ICOs, and they'll do what they can to discover and charge those behind scams. ----- <div class="pull-right"> <a href="https://steemit.com/@mooncryption"> <img src="https://steemitimages.com/DQmeUNtcQELSRTskp2PsyHSdBU7P2XztGFna3X5NejcaYJu/image.png" /> </a> <a href="https://www.facebook.com/mooncryption"> <img src="https://steemitimages.com/DQmUXj1qQsgXRzUFMagX9f1tFjaQ5ttAGkhhnegBvex8NCx/image.png" /> </a> <a href="https://twitter.com/@mooncryption"> <img src="https://steemitimages.com/DQmQeEtQPi1pGp8kFrbkMtcRn6vRDLFJp3X6fiJn5jmXj9R/image.png" /> </a> </div> Thanks for reading, — @mooncryption **image sources:** [1](https://enterprise.microsoft.com/en-us/wp-content/themes/my-theme/img/industry/state-and-local.svg), [2](https://steemit.com/blockchain/@sandcoin/how-ico-works-mechanics-of-working-with-ico), [3](http://www.huffingtonpost.com/william-morrow/5-homemade-tests-for-iden_b_12128848.html), [4](https://www.adviserinfo.sec.gov) **announcement:** @mooncryption is now on other social media! Use the buttons at the right to find our various social media pages from Steemit to Facebook to Twitter! :)
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permlink | breaking-sec-filing-charges-against-two-fraudulent-icos |
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This post received a 1.6% upvote from @randowhale thanks to @mooncryption! To learn more, check out [@randowhale 101 - Everything You Need to Know](https://steemit.com/steemit/@randowhale/randowhale-101-everything-you-need-to-know-about-randowhale)!
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Este Post ha recibido un Upvote desde la cuenta del King: @dineroconopcion, El cual es un Grupo de Soporte mantenido por 5 personas mas que quieren ayudarte a llegar hacer un Top Autor En Steemit sin tener que invertir en Steem Power. Te Gustaria Ser Parte De Este Projecto? This Post has been Upvote from the King's Account: @dineroconopcion, It's a Support Group by 5 other people that want to help you be a Top Steemit Author without having to invest into Steem Power. Would You Like To Be Part of this Project?
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<p>Congratulations! This post has been upvoted from the communal account, @minnowsupport, by bob-kremton from the Minnow Support Project. It's a witness project run by aggroed, ausbitbank, teamsteem, theprophet0, someguy123, neoxian, followbtcnews/crimsonclad, and netuoso. The goal is to help Steemit grow by supporting Minnows and creating a social network. Please find us in the <a href="https://discord.gg/HYj4yvw">Peace, Abundance, and Liberty Network (PALnet) Discord Channel</a>. It's a completely public and open space to all members of the Steemit community who voluntarily choose to be there.</p>
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