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New York-based businessman Maksim Zaslavskiy was arrested on Nov. 1, 2017, due to securities fraud conspiracy in connection with two ICOs, CoinTelegraph reported.

Based on the charge, one ICO was marketed as being supported by real estate assets, while the other ICO was claimed to be backed by diamonds.

"As alleged, Zaslavskiy and his associates enticed investors by promising returns using novel ICOs even though Zaslavskiy knew that no real estate or diamonds were actually backing the investments,” acting US Attorney Bridget Rohde said.

In late September 2017, the US Securities and Exchange Commission (SEC) filed charges against Zaslavskiy and two related firms – the Reserve Club (DRC) World and the REcoin Group Foundation - alleging that the businessman had misrepresented the amount he generated from the two ICOs.

At the time, the SEC was also successful in securing a court order to freeze the assets of Zaslavskiy and the two companies.

The prosecutors in the case have further claimed that the purported assets that support the token sale did not actually exist. If proven guilty, Zaslavskiy faces up to five years in jail, as well as a fine.

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