The CEO of Shopin, a blockchain-powered startup, has pleaded guilty to securities fraud related to $42.5 million in an initial coin offering, according to a report by Reuters.
Eran Eyal, who lives in Brooklyn and is 44 years old, also pleaded guilty to two separate felony counts of scheming to defraud, charges which are related to his previous companies, Passo Sync and Springleap.
New York Attorney General Letitia James ordered Eyal to step down as CEO and surrender $450,000 of Shopin related cryptocurrency as well as pay $600,000 to Springleap investors.
Eyal was accused of lying to investors in the coin offering and saying that Shopin had associations with major brands and retailers when it did not.
“This one individual created company after company after company just to continue cheating investors,” James said in a statement.
Eyal pleaded guilty in Brooklyn on Wednesday (Dec. 11) in front of Justice Danny Chun of the New York State Supreme Court.
In other news, popular cryptocurrency exchange BitMex and its founder Arthur Hayes are being sued for allegedly not paying out an early investor in the company, according to a report by Bloomberg.
Frank Amato and RGB Coin Ltd. have said they were the first seed investors in the company in 2015 and invested about $30,000. That money, Amato alleged, was supposed to be converted into equity, which is valued at over $50 million, but it didn’t happen. Amato said BitMex gave him false information.
“We will address Mr. Amato’s claims through the proper legal channels and will not comment beyond that,” BitMex said.
Amato wants to recoup the equity’s value, which is more than $50 million, and he’s looking for $250 million in punitive damages. The exchange itself is worth about $1 billion. Amato is a former commodity and derivatives trader at JPMorgan Chase, and Hayes used to trade derivatives at Citigroup and Deutsche Bank AG.