There are still fraudulent cases in the crypto industry that use ICOs to collect funds from investors without permission. Meanwhile, the SEC has once again sued a start-up for allegedly cheating investors for millions of dollars by allegedly cheating with non-existent partnerships.
Shopin Tokens founder illegally collects funds with false promises
UnitedData founder Eran Eyal sold fraudulently unregistered securities between August 2017 and April 2018 through an ICO for “Shopin Tokens”, according to the SEC lawsuit. With the capital raised through the sale of Shopin tokens, buyer profiles should be created that can track the shopping history of online retailers, which is said to be done via a blockchain.
No functional platforms have been created, despite the $ 42 million raised, according to the SEC. Authorities allege that both Eyal and Shopin have repeatedly distorted “partnerships” with well-known retailers and the alleged involvement of a prominent figure in the digital asset industry.
Another violation is that Eyal has used misappropriated investor funds for its own needs. That includes at least half a million dollars that he is said to have spent on rentals, entertainment, shopping, and even a dating service. The head of the New York office of the SEC, Eyal and Shopin, want to hold Eyal and Shopin responsible for defrauding innocent investors with false claims about relationships and contracts that they had acquired to support a blockchain-based universal shopper profile.
For example, the SEC has filed a lawsuit against Eyal and Shopin for violating the anti-fraud and registration requirements of US federal securities laws. If the procedure is successful, he will no longer be able to participate in a future offer of digital asset securities. Permanent injunctions, debilitating interest, and civil law sanctions are also enforced. Investors who have contributed funds to the Shopin ICO are advised to contact the SEC, possibly for possible refunds.
The SEC has been persistent against unregistered coin offers in the past two years. The latest examples are the SEC’s lawsuit against Telegram, which, according to the Commission, raised $ 1.7 billion in an unregistered ICO. The SEC filed an emergency lawsuit against Telegram last October, trying to prevent the company from continuing its plans to distribute GRAM tokens.