The Securities and Exchange Commission (SEC) of the United States of America charged entrepreneur Eran Eyal and his company Shopin, on account of fraudulent initial coin offering (ICO) activities. The announcement was made public in a press release on 11 December.
Brief of the Release
The release revealed that Eran Eyal proceeded with unregistered securities offering by initiating the selling of Shopin Tokens in an Initial Coin Offering raising more than $42 million from its investors. The company planned on using the profit from the sale of Shopin Tokens to build a universal shopper profile network that would track a customer’s product purchasing history.
Shopin never proceeded with the initial plan and proceeded on to fooling investors with the purported lie. Eyal also allegedly faked partnerships with well-known brands to lure in more dealers and investors alike. In addition to that, Eyal misappropriated over $500,000 of investor funds, utilizing it for miscellaneous activities like shopping, rent, entertainment, and dating service.
Charges and Penalties
The investigation was conducted by John O. Enright and Jon Daniels of the Cyber Unit and Bennett Ellenbogen at the New York Regional Office. The litigation would be done by Victor Suthammanont of the New York Regional Office and Messrs under the supervision of Sanjay Wadhwa, Senior Associate Director at the New York Regional Office.
The complaint charged Eyal and his company Shopin with the violation of the anti-fraud and registration regulation of the federal government. The SEC has asked for civil penalties including an officer-and-director bar against Shopin and Eyal also prohibiting Eyal from future dealings in digital assets. The case isn’t the first against the infamous Erin Eyal, he was previously charged with scamming investors for over $600,000 in association with his startup, Springleap.