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Thankfully, it’s becoming more difficult for individuals to conduct fraud in the cryptocurrency space. Regulators across the globe have wisened up about how they operate and can more easily identify scammers and thieves who attempt to take advantage of investors. The U.S. Securities and Exchange Commission (SEC) has just dropped the hammer on another character who thought he could get away with a scheme to become an instant millionaire through a fraudulent initial coin offering (ICO).
The SEC published a statement yesterday, indicating that it has brought charges against Eran Eyal and his UnitedData company. The firm was operating under the name Shopin and sold Shopin tokens through an ICO. The entity reportedly was going to use the funds to develop shopper profiles on the blockchain that could track consumer purchase histories on multiple retail platforms to make suggestions on future purchases.
The scheme was a ruse, though, and Eyal, along with his associates, continuously manipulated data to attract more attention. They lied about retailer agreements and the success of the platform, and Eyal ultimately took a minimum of $500,000 out of the company to use as his piggy bank, spending the money on things like rent, personal purchases, and even a dating service.
Eyal and the company are now facing charges of violating antifraud and registration regulations associated with securities laws. The SEC wants to give Eyal a permanent injunction against holding any officer or director position in any company and to pay civil penalties and disgorgement. He is also expected to be prohibited from being involved in any activity related to the sale of digital asset securities.
The director of the New York office of the SEC, Marc P. Berger, says in the statement, “As alleged in today’s action, the SEC seeks to hold Eyal and Shopin responsible for scamming innocent investors with false claims about relationships and contracts they had secured in support of a blockchain-based universal shopper profile. Retail investors considering an investment in a digital asset that meets the definition of a security must be afforded the same truthful disclosures as in any traditional securities offering.”
Eyal was taken down with the assistance of members of the SEC’s New York office Cyber Unit in conjunction with the New York Attorney General’s Office. If anyone has been a victim of the scam, they can contact the SEC directly to make a claim.
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