Thursday, June 30, 2022
Thursday, June 30, 2022
Home Blockchain Eran Eyal, South African founder of Shopin charged by SEC for a fraudulent $42.5 million ICO

Eran Eyal, South African founder of Shopin charged by SEC for a fraudulent $42.5 million ICO

by Fredrick Gitaka
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Eran Eyal, the founder of Shopin has been charged by Securities and Exchange Commission (SEC) for a fraudulent $42.5 million initial coin offering (ICO).

Eyal, a 44-year-old digital-asset entrepreneur, and former Springleap CEO, allegedly defrauded investors in an initial coin offering (ICO) that raised more than $42 million from hundreds of investors.

According to the SEC, from August 2017 to April 2018, Eran Eyal, a dual citizen of Israeli and South Africa and founder of UnitedData, Inc. trading as Shopin, conducted a fraudulent unregistered securities offering by selling Shopin Tokens in an ICO to create blockchain-based universal shopper profiles that would track customer purchase histories across online retailers and recommend products based on this information.

However, Shopin never created a functional platform and Eyal and Shopin repeatedly lied to investors in connection with its offering, including misrepresentations about purported partnerships with certain well-known retailers and about the involvement of a prominent entrepreneur in the digital-asset space. 

The SEC also alleges that Eyal misappropriated investor funds for his personal use, including at least $500,000 used for rent, shopping, entertainment expenses, and a dating service. Eyal lives in Brooklyn, New York.

“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,” said Marc P. Berger, Director of the SEC’s New York Regional Office. “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.”

The SEC’s complaint, filed in federal district court in Manhattan, charges Eyal and Shopin with violating the antifraud and registration provisions of the federal securities laws, and seeks permanent injunctions, disgorgement with interest, and civil penalties, as well as an officer-and-director bar against Eyal and a bar against Eyal and Shopin prohibiting them from participating in any future offering of digital-asset securities.

SEC is calling for investors in the Shopin ICO who believe they may be a victim should contact the SEC at its TCR page.  The SEC’s Office of Investor Education and Advocacy issued an Investor Bulletin on initial coin offerings in July 2017. 

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