Te U.S. Securities and Exchange Commission (SEC) charged a crypto-entrepreneur and his company for running a fraudulent unregistered initial coin offering (ICO) that raised more than $42 million from many investors.
SEC's complaint was that Eran Eyal and UnitedData, Inc. d/b/a Shopin, allegedly defrauded investors by conducting a fraudulent unregistered securities offering by selling Shopin Tokens in an ICO from August 2017 to April 2018.
The agency said Eyal and Shopin are allegedly responsible for scamming innocent investors. They claimed and lied to potential investors that the funds raised in the ICO will be used to create universal shopper profiles, maintained on the blockchain. It would help track customer purchase histories across online retailers and recommend products based on this information.
They also made false claims about relationships and contracts they had secured in support of a blockchain-based universal shopper profile.
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 and Shopin are charged with violating the anti-fraud and registration provisions of the federal securities laws.
The SEC 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.
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