The CEO of Shopin, a crypto project that aims to use blockchain technology and artificial intelligence to create profiles for shoppers, has been accused by the Securities and Exchange Commission (SEC) of defrauding investors following its 8-month ICO that raised $42 million. The SEC alleges that Eran Eyal overstated the company’s partnerships and did not have a product ready at the time of the ICO, a rule that has caught out Veritaseum and other projects this year, as well as spending ICO on himself.
Eyal “Repeatedly Lied” to Investors
Shopin was supposed to use the ICO funds to create universal shopper profiles on the blockchain that would track customer purchase histories across different online retailers and use AI to recommend products based on this information. However, not only did Shopin fail to build a working platform in time for the ICO, Eyal also claimed non-existent partnerships.
The complaint alleges that not only did Shopin never create a functional platform, Eyal also “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.”
Eyal Caught with His Hands in the Register
The SEC also alleges that Eyal couldn’t resist dipping his hands into the ICO funds for personal use, including using at least $500,000 for rent, shopping, and entertainment expenses. He also allegedly used investors’ money for a dating service, so at least it’s nice to know that they weren’t the only ones getting fucked by the arrangement.
Eyal and Shopin have been officially charged with violating antifraud and registration provisions of the federal securities laws, with the SEC seeking permanent injunctions, disgorgement with interest, and civil penalties. They are also seeking to ban Eyal from being an officer or director for any company and prohibiting both him and Shopin from participating in any future offering of digital-asset securities.