Shopin CEO Charged With Fraud In $42M Unregistered ICO, Spent $500k On Personal Expenses
- CEO Eran Eyal pled guilty to charges in New York last year for a theft of $600,000 with Springleap.
- The director of the New York regional office for the SEC, Marc P. Berger, gave a statement on the recent charges against Eyal and Shopin.
Shopin hosted a $42 million initial coin offering, though the U.S. Securities and Exchange Commission has now come after the company and founder Eran Eyal. The SEC charged Eyal and Shopin with fraud, announcing on Wednesday that the exchange had been selling unregistered securities i.e. Shopin Tokens. Reported by The Block, the sale lasted from August 2017 to April 2018, stating that the tokens were going to be used in the creation of a database for shopper profiles with blockchain technology.
The complaint by the SEC states that the platform promised to consumers in this ICO was never created, adding that Eyal has personally used $500,000 of the funds for shopping, entertainment, and rent. Eyal even allegedly used the money for a dating service and lied about the partnerships that the company was trying to establish with retainers. It further stated that there were “at least four misrepresentations in marketing” the Shopin token, including that they had assigned a “prominent Silicon Valley blockchain entrepreneur” to be an advisor to the company. Marc P. Berger, the Director of the SEC’s New York Regional Office, stated,
“As alleged in today’s action, the SEC seeks to hold Eyal and Shopin responsible for scamming innocent investors with false claims about relationships and contracts they had secured in support of a blockchain-based universal shopper profile. Retail investors considering an investment in a digital asset that meets the definition of a security must be afforded the same truthful disclosures as in any traditional securities offering.”
In August last year, Eyal had been charged for another theft, but by the New York Attorney General. The allegations stated that Eyal had stolen $600,000, as he misrepresented a company that he developed called Springleap. During this case in New York, Eyal pled guilty to the criminal charges. However, in this case with the SEC, permanent injunctions are being sought, including civil penalties and disgorgement with interest. The agency is also seeking to stop Eyal and Shopin from ever being involved in crypto securities offering again.