SEC charges Shopin and its founder Eran Eyal with fraud over $42 million ICO

The SEC announced today that it charged Eran Eyal and his company Shopin with defrauding investors in its $42 million unregistered Shopin Token ICO. The complaint alleged that from August 2017 to April 2018 Eyal conducted a fraudulent unregistered securities offering by selling Shopin Tokens in its ICO. The complaint further alleges that Eyal made numerous misrepresentations in connection with the offering, misappropriated at least $500,000 of investor funds for personal use, and ultimately failed to deliver a functional platform. Shopin planned to use the proceeds of the offering to develop a blockchain based retail platform that would store and track shopper profiles across online retailers and recommend products based on this information.

Why it matters:

• The SEC appears to be slowly ramping up the cadence of enforcement announcements regarding ICO projects. This announcement follows recent SEC enforcement actions against high profile projects including Telegram, Kin, and EOS, who each did ICOs throughout 2017 and 2018.
• The announcement provides additional validation that the SEC’s position that most ICOs are unregistered securities offerings is indeed serious and that projects that raised money though ICOs need be on watch.
  

See our full list of SEC enforcement actions, orders, speeches, and more here.