SEC proposes final judgment in fraudulent ICO case

Maria Nikolova

The proposed judgment finds Eran Eyal, founder of UnitedData, Inc. d/b/a Shopin, liable for disgorgement of $422,100.

The action launched by the United States Securities and Exchange Commission (SEC) against UnitedData, Inc. d/b/a Shopin and its founder Eran Eyal is close to a conclusion, as the regulator has submitted a proposed final judgment at the New York Southern District Court.

The document, seen by FinanceFeeds, finds Eyal liable for disgorgement of $422,100, representing profits gained as a result of the fraudulent conduct alleged in the SEC’s Complaint together with prejudgment interest thereon in the amount of $34,940, for a total of $457,040, which is deemed satisfied by the defendant’s payment of approximately 3,105.78 Ether tokens pursuant to the plea agreement dated December 11, 2019.

Eyal is also prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act.

Furthermore, the defendants are prohibited from engaging in any offering of digital asset securities.

The defendants are permanently restrained and enjoined from violating Section 17(a) of the Securities Act of 1933 (the “Securities Act”) [15 U.S.C. § 77q(a)] in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly to employ any device, scheme, or artifice to defraud.

Let’s recall that, back in December 2019, the SEC charged Eyal and Shopin with defrauding investors in an initial coin offering (ICO) that raised more than $42 million from hundreds of investors.

The SEC’s complaint alleges that from August 2017 to April 2018, Eyal conducted a fraudulent unregistered securities offering by selling Shopin Tokens in an ICO. 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 alleged 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.

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