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Three years hard time. That’s the fate of a confessed ICO fraudster, if the U.S. government has its way.

Maksim Zaslavskiy, the man behind “cryptocurrency” projects REcoin and Diamond Reserve Club, raised a cool $300K in two ICOs in July 2017, according to court documents. At the time, Zaslavskiy touted REcoin as the “first ever cryptocurrency backed by real estate,” and Diamond Reserve Club as an “exclusive and tokenized membership pool” backed by the precious stones.

It turns out, though, that none of that was true—there were no diamonds, no real estate, and no cryptocurrency of any kind. The whole thing was just an “old-fashioned fraud dressed in a new-fashioned label,” as described by federal prosecutors.

Zaslavskiy pleaded guilty to the charge of conspiracy to commit fraud in November 2018, laying out the scheme in a brief mea culpa and asking the court for mercy. It was the first fraud prosecution ever brought by the feds against an ICO. The crime carries a maximum sentence of five years, depending on the severity, yet Zaslavskiy’s defense asked the court for probation. After all, the $300,000—a paltry sum by 2017 ICO standards—has all been returned, they say.

But the DOJ is unmoved.

In a sentencing memorandum filed on Wednesday in a federal New York court, prosecutors argue Zaslavskiy should serve 30 to 37 months in jail. The filing recounts the entire sordid affair with REcoin and Diamond, noting that Zaslavskiy did not, in fact, return ICO funds to his more than 1,000 investors willingly.

Prosecutors claim that ICO funds were first refunded when online payment processors, specifically PayPal and WePay, flagged the transactions as potentially fraudulent and reversed the charges. They say Zaslavskiy then began to return investor money when “he was caught by the SEC.” The Commission launched a civil enforcement action against REcoin, Diamond, and Zaslavskiy over the sale of unregistered securities in September 2017, a month before criminal charges were handed down.

“The defendant’s sentencing submission clearly demonstrates that he still fails to take full responsibility for his conduct,” reads the memorandum. What’s more, prosecutors say the court must send “a real message” to not only Zaslavskiy, but to other swindlers looking for a quick ICO hustle.

The fact that the fraud involved an ICO, they say, means there is a “greater need for general deterrence,” since companies and individuals are “increasingly using ICOs” to solicit investment opportunities promising “lucrative returns”—and that will bring an “increased risk of fraud and manipulation.”

The DOJ may want to check its calendars, because it sounds like an argument that’s two years too late. In any event, that’s for a judge to decide, and a ruling on Zaslavskiy’s sentencing is expected on Monday.

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