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Eran Eyal disappears from social media after new fraud charges laid by SEC over $42m Shopin ICO [Updated]

UPDATE (12 December): Fraud-accused Eran Eyal responded to a text message that Ventureburn sent to him earlier today, requesting comment and received this reply (at 4.20pm SA time): 

Hi Stephen, hope you’re well
I cannot give any comment at this time.
Wishing you the best.

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New York based SA tech entrepreneur Eran Eyal appears to have deleted both his Facebook and Twitter accounts and has disappeared off his startup’s Telegram account, where up till yesterday he had liaised near daily with investors.

An automated message sent from Eyal’s email says he is “no longer affiliated with Shopin”. “Please contact Henrik Rasmussen, the Acting CEO at Godspeed, Eran Eyal,” it reads.

It follows charges laid against him and his startup Shopin yesterday by the US’s Securities and Exchange Commission (SEC), for defrauding investors in an initial coin offering (ICO) that raised more than $42-million from hundreds of investors.

Eyal already faces charges of fraud relating to his previous startup Springleap, brought against him on 24 August last year, in which the New York Attorney General alledges he stole $600,000 from investors by fraudulently soliciting investors to purchase convertible notes through false representations of his company, Springleap (see this story).

The SEC alleges that Eran Eyal conducted a fraudulent unregistered securities offering by selling Shopin Tokens in an ICO

In a formal statement lodged yesterday, the SEC’s alleges that from August 2017 to April 2018, Eyal, founder of UnitedData Inc, which trades as Shopin, conducted a fraudulent unregistered securities offering by selling Shopin Tokens in an ICO.

It comes after Ventureburn in June reported that the New York State Attorney General in the US and the SEC had launched a probe into Shopin (see this story).

The SEC in its complaint (opens as a PDF) says Shopin aimed to use the funds from the sales of the Shopin Tokens to create universal shopper profiles, maintained on the blockchain, that would track customer purchase histories across online retailers and recommend products based on this information. As alleged in the SEC’s complaint, Shopin never created a functional platform.

The complaint further alleges that Eyal and Shopin 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 (stories broken by Ventureburn — Ed).

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.

Said Marc Berger, the director of the SEC’s New York regional office: “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.”

The SEC’s complaint, filed in the federal district court in Manhattan, charges Eyal and Shopin with violating the antifraud 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.

There was no immediate statement posted by Eyal or Shopin on Shopin’s website. Ventureburn has contacted Eyal by email and will update the story accordingly, should he comment.

This is a developing story.

Read more: Fraud-accused Eran Eyal offering three immigrant students scholarships at $3600 each
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Read more: I spent thousands of hours, last dollar to save former company says Eran Eyal
Read more: Questions surround involvement of Eran Eyal’s former partner in Shopin pilots
Read more: Stop misrepresenting us as Shopin investor unicorn ZocDoc tells Eran Eyal
Read more: Eran Eyal lied about existence of Springleap advisory board – UK investor
Read more: Former Springleap founder Eran Eyal named as ‘co-CEO’ of Shopin
Read more: Springleap’s Eran Eyal misrepresented me as Shopin adviser – Vinny Lingham
Read more: BREAKING: I am innocent of malicious allegations says Springleap’s Eran Eyal
Read more: BREAKING: Springleap’s Eran Eyal released from US prison, posts $250k bail
Read more: Are these the messages Springleap’s Eran Eyal sent to investors for funding?
Read more: Springleap’s Eran Eyal removed as CEO of Shopin and replaced with interim head [Updated]
Read more: Springleap’s Eran Eyal did not seem like scammer to me – DocuSign founder
Read more: Charges against Springleap founder not first time Eran Eyal’s in trouble with law [Updated]
Read more: Investor gatvol over losing R8.5m to Springleap through ‘misrepresentation’
Read more: Springleap charges: Are claims as world’s 7th most innovative firm a fabrication? [Updated]
Read more: SA entrepreneur Eran Eyal charged with fraud in the US over startup Springleap
Read more: Springleap’s Trevor Wolfe talks agencies, startups, and pivots [Q&A]
Read more: Springleap’s new Creatives Insights platform helps brands expand to foreign markets
Read more: Springleap goes big: expands into Middle Eastern, pan-African markets
Read more: SA crowdsource design startup Springleap secures R4m+ Angel round
Read more: Life after t-shirts: Ventureburn gets the exclusive behind Springleap’s pivot

Featured image: Former Springleap founder Eran Eyal (Facebook)

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