News Shopin blockchain startup CEO pleads guilty to fraud: NY...

Shopin blockchain startup CEO pleads guilty to fraud: NY attorney general

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NEW YORK (Reuters) – The chief executive of Shopin has pleaded guilty to felony securities fraud in connection with an estimated $42.5 million initial coin offering by his blockchain startup, the office of New York Attorney General Letitia James announced on Thursday.

Eran Eyal, 44, of Brooklyn, also pleaded guilty to two felony counts of scheming to defraud in connection with his two prior companies, Passo Sync Inc and Springleap Inc.

The attorney general said Eyal also agreed to step down as Shopin’s CEO, was ordered to surrender $450,000 of cryptocurrency related to Shopin and pay $600,000 to Springleap investors, and received a three-year ban from raising capital and serving as an officer of a business in New York.

The plea was announced one day after the U.S. Securities and Exchange Commission filed a civil fraud lawsuit accusing Eyal, a dual citizen of South Africa and Israel, of falsely telling investors in the coin offering that Shopin had close ties to major retailers and an unnamed Silicon Valley entrepreneur.

A lawyer for Eyal did not immediately respond on Thursday to requests for comment.

Authorities said Eyal falsely promised Shopin investors that their money would go toward creating “universal shopper profiles” that would track customer purchases from online retailers and recommend products.

They also said Eyal falsely told investors that the platform had been successfully tested at Bed Bath & Beyond and Ermenegildo Zegna, and that Shopin had lined up partnerships with several major retailers. The SEC said Eyal spent some proceeds on personal expenses, including a dating service.

“This one individual created company after company after company just to continue cheating investors,” James said in a statement.

Eyal pleaded guilty on Wednesday before Justice Danny Chun of the New York State Supreme Court in Brooklyn, according to James’ office.

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