The New York Attorney General (NYAG) accused Shopin founder Eran EYAL of fraud. The defendant pleaded guilty to a criminal offense for a fraudulent ICO that raised more than $42 Mln between August 2017 and April 2018. Eyal also pleaded guilty to fraud in the amount of $600,000 by distorting the facts about the staff and customers of his previous startup called Springleap.
According to the SEC, the defendant conducted an unregistered offering of securities. The Commission also stated that it had misappropriated investor funds to pay for personal expenses. Attorney General Letitia JAMES commented:
“Using fake product trials and nonexistent contracts with major retailers he was able to lure victims to invest in his technology schemes, including his very own cryptocurrency. We will use every available resource at our disposal to pursue all who attempt to abuse and manipulate the system, because no one is above the law.”Despite the charge, Eyal did not receive a prison sentence. The court ordered him to pay $125,000 in restitution and $ 475,000 in judgments to investors and transfer the remaining $450,000 in cryptocurrency to the AG Office. In addition, he is required to resign as Shopin CEO and is prohibited from raising capital or serving as an officer in a business in New York for three years.