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The latest series of events in the cryptocurrency news show that the US Securities and Exchange Commission (SEC) is making moves to several ICO players as of lately. The most recent update shows us that SEC charges Shopin and its founder, Eran Eyal, with orchestrating a fraudulent ICO.

The initial coin offering (ICO) which was carried out by Shopin is now under charge by the US SEC. A press release issued on December 11 confirms this and shows that the SEC charges Shopin as an ICO which raised more than $42 million from August 2017 to April 2018. According to the regulator, Shopin’s actions constituted an unregistered securities offering on Shopin Tokens.

As Eyal told investors, the funds will be used from the token sale in order to create blockchain-based shopper profiles. These profiles would be used to track customer purchase histories across online retailers as well as recommend products based on this information. Still, as SEC Charges Shopin’s founder, we can see that he (Eyal) never created a functional platform.

The Director of the SEC’s New York Regional Office, Marc P. Berger, recently noted:

“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.”

Furthermore, he also told the public that Eyal lied about having forged partnerships with established retail outlets when in fact no such partnerships existed. The SEC also claims that Eyal misappropriated investor funds to pay for personal expenses. The SEC charges Shopin for this and the complaint clearly states:

“Eyal used over $500,000 of investor funds for expenses such as his rent, retail shopping, entertainment, tickets to philanthropic events, and a dating service, but omitted to disclose to investors that he would use any proceeds for his own benefit.”

The official charges show that Shopin was violating the anti-fraud and registration provisions of the federal securities laws. For that, it is seeking injunctive relief, disgorgement with prejudgment interest as well as civil money penalties.