Source: https://es.scribd.com/document/388358607/USA-vs-Zaslavskiy
Timestamp: 2019-04-19 13:18:49+00:00

Document:
LLC("REcoin")and DRC World,Inc., a.k.a. Diamond Reserve Club("DRC"or "Diajnond").
Securities Fraud, in connection with REcoin (Count Two)and Diamond (Count Three)!
support of the briefs submitted by the U.S. Attorney's Office and Zaslavskiy's criminal defense counsel in this case.
Dismiss, ECF No. 27("Nagi Mem. in Supp.").
of 1933 (the "Securities Act"), and that these laws are not unconstitutionally vague. Gov't Mem.
unconstitutionally vague as applied to this case. Zaslavskiy's motion to dismiss is denied.
we accept as true for purposes of the present motion." See United States v. Raiarantnam, No.
also Indictment, ECF No. 7.
purported cryptocurrency "tokens" or "coins" in connection with the REcoin and Diamond ICOs.
Id. ^ 10. He did so by offering "investment opportunities" based on material false statements.
REcoin was expected to launch its ICO in August 2017. Id K 12.
funds from REcoin to Diamond never received coins or tokens in exchange. Mi II23.
ICO began on August 7, 2017,'over 1.5 million in direct REcoin token purchases [were made].'" Indictment^ 19.
^ As defined in the Indictment, the Diamond "IMO" was "functionally the same as an ICO." Indictment ^ 3.
written statement of the essential facts constituting the offense charged.'" See United States v.
protection against prosecution for crimes based on evidence not presented to the grand jury."
194 F.3d at 44 (internal quotation marks and citations omitted).
to dismiss. United States v. Perez. 575 F.3d 164, 166-67(2d Cir. 2009)(quoting United States v.
omitted); United States v. Phillips. 120 F. Supp. 3d 263, 268(E.D.N.Y. 2015)(Dearie, J.).
whatever name they are called.'")(quoting Reves v. Emst & Young,494 U.S. 56,61 (1990)).
deceit upon any person, in connection with the purchase or sale of any security." 17 C.F.R. § 240.1 Ob-5.
can only fairly be a question of proof at trial, based on all of the evidence presented to a jury.
seek the use of the money of others on the promise of profits.").
instrument or transaction constitutes an 'investment contract' under the federal securiti^ laws,"
test must be established for a scheme or transaction to qualify as an investment contract.! Revak.
the enterprise." See Howev,328 U.S. at 300.
be required to conduct an independent Howev analysis based on the evidence presented at trial.
virtual tokens or coins. 10-11, 18-19: see also SEC v. SG Ltd.. 265 F.3d 42,48(1st Cir.
security.'")(quoting Int'l Bhd. Of Teamsters. Chauffeurs. Warehousemen & Helpers of Am. v.
some REcoin investors "transferred" their investments in REcoin to Diamond. 14 UK 19, 23.
account, such as their credit cards or direct debit bank accounts." Indictment ^ 8.
U.S. at 852). To allege a common enterprise, the Indictment must establish that "commonality"
commonality test, which requires that 'the fortunes of investors...be linked only to the efforts ofthe promoter.'"
Cf Revak. 18 F.3d at 87-88; see also Indictment II, 14, 21.
scope of our analysis at this stage.
pooling of assets in a common enterprise. But see Def. Mot. to Dismiss at 13.
(quoting SEC v. Aaua-Sonic Prods. Corp.,687 F.2d 577, 582(2d Cir. 1982)).
participation in earnings resulting from the use ofthe investors' funds."). The REcoin "token"
was described to investors as "an attractive investment opportunity" which "grows in value,"
were told that Diamond was expected to grow by 10 to 15 percent per year. See Indictmentf 22.
develop the ventures, invest proceeds in real estate and diamonds, and generate profits.
SEC V. Glenn W.Turner Enter.. Inc.. 474 F.2d 476,482(9th Cir. 1973), cert, denied.^14 U.S.
ones, those essential managerial efforts which affect the failure or success ofthe enteijprise.").
Sec. Litig.. 642 F. Supp. 718,738(E.D.N.Y. 1986)(Wexler, J.); In re J.P. Jeanneret. 769 F.
strategies. Indictment ^14; but see Def. Mot. to Dismiss at 17.
definitions of"security." See 15 U.S.C § 78c(a)(10); 15 U.S.C. § 77b(a)(n: see also Landreth Timber Go. v.
"decisions dealing with the scope ofthe term" security)(citing cases).
developed at trial, we need not resolve this issue at this time.
applied to his conduct, as it is described in the Indictment. It is not. See United States V.
also Mannix v. Phillips. 619 F.3d 187,197(2d Cir. 2010); United States v. Motz,652|F. Supp.
2d 284, 294(E.D.N.Y. 2009)(Spatt, J.).
ofthe conduct it punishes, or so standardless that it invites arbitrary enforcement." Jotmson v.
as the prior decisions gave reasonable warning." at 589(citations omitted).
confidence after the market crash of 1929")(internal quotation marks and citations omitted).
courts and litigants as to the definition of"investment contract" under the securities lajws.
something a 'currency' or a currency-based product does not mean that it is not a securityj.").
pass regulatory and criminal enforcement of the securities laws.

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