Shopin CEO Erin Eyal has pleaded guilty to charges brought against him by the New York Attorney General’s Office (NYAG) for his role in a $42.5 million ICO fraud, according to a report by Reuters.
Eyal has since stepped down as CEO of Shopin. His company profile and Twitter accounts were removed immediately following news of his SEC investigation.
Shopin raised $42.5 million during an ICO sale, which attracted hundreds of US investors.
However, it soon emerged that Shopin had failed to build any of its promised platform and had consistently lied about commercial partnerships in an attempt to mislead investors.
Shopin claimed to have partnerships and interest from major retailers such as Bed, Bath and Beyond and endorsements from executives at Macy’s department store.
For his central role in the ICO fraud, Eyal has been ordered to pay $450,000 in cryptocurrency assets to Shopin investors. It’s unclear at this point where the other millions of dollars of investor funds have gone or if they will be reimbursed.
An official press release from the NYAG claims that Eyal must surrender all of his remaining personal cryptocurrency wallets to authorities.
Prosecutor Letitia James said:
“Using fake product trials and nonexistent contracts with major retailers, he was able to lure victims to invest in his technology schemes, including his very own cryptocurrency. We will use every available resource at our disposal to pursue all who attempt to abuse and manipulate the system, because no one is above the law.”
As reported by Coin Rivet earlier this week, Eyal used investors’ money to fuel his lavish lifestyle, which included paying his rent and even a paid dating service.
In addition to charges related to Shopin, Eyal also faced scrutiny for his role in previous projects Passo Sync and SpringLeap, which saw him plead guilty to two felony counts of scheming to defraud investors.
SpringLeap investors will receive $600,000 from Eyal. However, the value of funds defrauded in Eyal’s SpringLeap scam hasn’t been revealed.
Surprisingly, Shopin’s website is still live, and there has been no official statement from the team. Since the news broke, Shopin’s Twitter has also remained silent.