The organizer of Shopin $42 million ICO paid a $450 000 fine

by in Cryptocurrency News

Shopin ICO fraud

A federal judge in the southern district of New York ordered Eran Eyal, CEO of Shopin, a crypto company, to pay a fine of $450,000 after being convicted of three fraud episodes through an unregistered $42 million ICO.

Related: US court upholds fraud charges against former head of Mt.Gox

The U.S. Securities and Exchange Commission (SEC) in December 2019 accused Israeli citizen Eyal and Shopin of violating securities laws. The regulator requested the court to oblige the accused to return the illegally appropriated funds with interest and fines. A similar charge was brought by the New York prosecutor's office.

According to the SEC, Eyal told investors that the funds raised would be used to create a blockchain platform for storing and tracking profiles of online store customers, which was never created. Instead, Eyal appropriated more than $500 thousand for use in personal expenses.

Eyal agreed to pay $450 thousand, while he did not admit or deny his guilt in the proceedings with the regulator. Also, the SEC achieved a ban on Eyal to act as an official in any offer of securities or tokens.

According to the SEC, Eyal complied with a court order with 3105 Ethereum coins. Of this amount, $422,100 were paid to recover the misappropriated funds and $34,940 as a percentage before a court decision.

Immigration and customs services deported Eyal to Israel in May.