- The founder of Shopin has just been charged by the United States Securities and Exchange Commission (SEC).
- Eran Eyal and his company defrauded hundreds of investors in a coin offering that was able to bring in over $42 million.
The founder of Shopin has just been charged by the United States Securities and Exchange Commission (SEC) for being behind one of the many initial coin offering scams out there in the world today.
As was announced on December 11th, the securities commission claimed that Eran Eyal and his company defrauded hundreds of investors in a coin offering that was able to bring in over $42 million from August 2017 to April last year.
The SEC said that the company's actions came about due to an unregistered offering of the coins from the firm, Shopin tokens.
Speaking to investors, Eyal said he would be using the funds raised in the coin offering to help create shopper profiles all based on the blockchain. Such profiles would then be able to see the history of customer’s purchases over many online retailers and recommend products based on this data.
Despite all this, Eyal never actually designed a functional platform for people to use.
Director of the SEC's New York Regional Office, Marc 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."
Claims also came up from the securities commission that Eyal didn’t use investor funds properly and went to funding personal expenses.
“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.”
It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!