According to the SEC, Maksim Zaslavskiy had been selling tokens through the Initial Coin Offering (ICO) promising the token holders sizeable return from the operations of the REcoin Group Foundation and DRC World (aka Diamond Reserve Club), while none of the companies had operations.
During the ICO, Zaslavskiy made many statements that were false and misleading, including overstating the amount of funds that he raised and the size of team behind the project, among the others.
The SEC filed a complaint in federal district court in Brooklyn, NY charging Zaslavskiy, REcoin Group Foundation and Diamond Reserve Club with violations of the anti-fraud and registration provisions of the federal securities laws. The SEC seeks permanent injunction and disgorgement plus interest and penalties. In addition to a permanent officer-and-director bar and a bar from participating in any offering of digital securities for Zaslavskiy personally.
If SEC succeeds, Zaslavskiy and his companies would be required to return the funds to the token purchasers and pay heavy fines. The possibility of the criminal punishment is unknown at this time; however, the referral of the case to the Department of Justice (DOJ) can be a possibility.