Deceitful initial coin offering (ICO) charged by SEC

Deceitful initial coin offering (ICO) charged by SEC

The U. S Securities and Exchange Commission (SEC) has charged the founder Shopin, Eran Eyal, with orchestrating a deceitful initial coin offering (ICO).

According to a press release on December 11, the Securities and Exchange Commission alleged that the entrepreneur and his company swindled hundreds of investors in an Initial Coin Offering that raised more than 42 million dollars from August 2017 to April 2018. Shopin’s actions made up an unregistered securities offering of Shopin Tokens.

Eyal told investors that he would make use of the funds from the token sale to make blockchain-based shopper profiles. These profiles would then track clients purchase histories across online retailers and refer products based on this data. However, Eyal never made a purposeful platform. Director of the Securities and Exchange Commission’s New York Regional Office, Marc P. Berger said:

“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.”

Eyal supposedly lied about having faked partnerships with established retail outlets when no such partnerships existed.

The Securities and Exchange Commission additiinally claims that Eyal illegal investor funds to procure for personal expenses. From the SEC complaint:

“Eyal used over $500,000 of investor funds for expenses such as his rent, retail shopping, entertainment, tickets to philanthropic events, and a dating service, but omitted to disclose to investors that he would use any proceeds for his own benefit.”

The commission has sue Eyal and Shopin with violating the anti-fraud and registration provisions of the federal securities laws, and seek disgorgement with prejudgment interest, injunctive relief, and civil cash penalties. The Securities and Exchange Commission additional seeks a bar against Eyal and Shopin prohibiting them from taking part in any future securities token offerings.

Eyal had antecedently been charged with defrauding investors for 600,000 dollars by misrepresenting the employees and customers of his previous startup, Springleap

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