Shopin blockchain startup CEO charged with ICO fraud

The U.S. Securities and Exchange Commission has charged the chief executive of Shopin with defrauding investors to the tune of $42.5 million through initial coin offering, by lying to investors that the startup had close ties to major retailers and a Silicon Valley entrepreneur.

Eran Eyal, 44, a dual citizen of South Africa and Israel who lives in Brooklyn, New York, has pleaded guilty to criminal charges brought by the office of New York Attorney General Letitia James, said the SEC.

Eyal and Shopin’s lawyer did not immediately respond to requests for comment.

Neither the SEC nor James’ office responded to requests for comments.

The SEC did not describe the criminal charges.

In its civil complaint against Shopin and Eyal, the SEC had stated, Eyal had promised investors who bought digital tokens that their money would go toward creating “universal shopper profiles” that would track customer purchases across online retailers and recommend products.

Eyal had falsely claimed that the platform had been successfully tested at Bed Bath & Beyond and Ermenegildo Zegna, said the regulator. The SEC also said, Eyal had lied about Shopin receiving steady monthly payments through its partnerships with several retailers.

According to the SEC’s charge, Eyal had misappropriated some funds to pay for personal expenses, including rent, entertainment, shopping, and a dating service.

The SEC is seeking to recoup the ill-gotten gains.

The SEC did not identify the Silicon Valley entrepreneur.

According to the complaint, Shopin’s offering was conducted between August 2017 and April 2018 through a “pre-sale” of tokens to wealthy and other investors, and an initial coin offering to the general public.

Shopin’s legal name is UnitedData Inc, said the SEC.

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