Will More ICO's of the Era Face A Similar Fate?
The bull run of 2017-18 was a pretty wild time in the world of cryptocurrencies. As Bitcoin and Ethereum were breaking higher highs, hundreds of new cryptocurrencies were developed. These new cryptocurrencies often made some pretty bold promises regarding future adoption & tech.
Many of the new currencies developed then used Initial Coin Offerings (ICOs) to raise funds to develop their project. The majority of these ICOs have raised massive amounts of funds and delivered very little if anything.
While there have been a handful of exceptions, ICOs have developed a nasty reputation and have been banned in several countries. It seems that the United States' SEC has begun acting against the some of the scammier projects.
Shopin ICO & Fraud
Founded & led by CEO Eran Eyal, the Shopin ICO took place between the 30th of March to the 29th of April 2018. In about a month Shopin managed to raise the equivalent of $42 million dollars in Ethereum.
Shopin had a pretty impressive team listed which included advisors Steven Nerayoff & Tom Gonser. Nerayoff previously advised Ethereum & Gonser was the founder of DocuSign.
They claim to be creating a universal shopping profile for a personal shopping experience online. Shopin have also claimed to combine artificial intelligence with blockchain technology to reach this goal.
Unfortunately for investors, Shopin promised much and delivered little. Many of the partnerships were revealed as false claims and no functional platform was developed. It was later claimed that Shopin CEO Eyal repeatedly lied to investors regarding retailer adoption and partnerships.
The SEC has alleged that Eyal misappropriated investor funds for personal use. At least $500,000 has been used by Eyal for dating services, shopping, entertainment, and rent. Eyal was later charged by the SEC for fraud and the sale of securities.
Seeing the massive number of ICOs, we could see more arrests in the future. Many ICOs had teams based in the US or sold tokens to US clients which means that they could enter the cross-hairs of the SEC.
Written by Jonathan Ganor
Writer & cryptocurrency aficionado