SEC to Accuse Shopin in $42M Worth ICO Scam

The Commission believes the actions of Shopic during the ICO was the offering or unregistered securities
12 December 2019   472

The U.S. Securities and Exchange Commission (SEC) has accused Shopin and its CEO Eran Eyal of cryptocurrency cheating on investors during the initial offer of $ 42 million tokens.

According to the SEC, the actions of Eyal and his company were an unregistered offer of securities in the form of Shopin tokens.

Eyal told investors that the funds raised would be used to create a blockchain platform for storing and tracking profiles of online store customers. In addition, he lied about existing partnerships with retailers, the agency said.

The problem is that Shopin never created a system, says the regulator.

Instead, Eyal appropriated more than $ 500,000 for personal use, including a dating service.

SEC accused 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 payment of fines. In addition, the SEC has proposed banning Eyalu from acting as an official in any offer of securities or tokens.

In a statement, the SEC also recalled that the prosecutor’s office in 2018 accused Eyal of appropriating $ 600 thousand of investor funds to his previous company Springleap.

Malaysia to Regulate ICO and IEO

Rules says tokens can be distributed via venture capitalists and financial institutions without selling shares and without debt instruments
16 January 2020   105

In Malaysia, the procedure for initial coin offerings (ICO) and initial exchange offerings (IEO) has been established. The Malaysia Securities and Exchange Commission (SC) provided relevant guidance for participants in the digital asset industry.

According to the regulator, projects can distribute their tokens through venture capitalists and financial institutions without selling shares and without using debt instruments. It was also established the maximum limit on the amount of funds raised through ICO, which will be 100 million Malaysian ringgit or about $ 24.5 million. No special requirements for investors are provided, that is, both institutional and retail investors will be able to participate in such campaigns.

After the completion of sales, the regulator will monitor the spending of collected funds.

Digital tokens offering can provide another alternative fundraising avenue for early-stage entrepreneurs. This initiative supports Malaysia’s Shared Prosperity Vision 2030 (SPV2030) by supporting the growth of SMEs and micro businesses which are targeted to contribute 50% to Malaysia’s GDP. It also aligned with SPV2030’s aspiration to create 30% high technology Malaysian companies.

 

Datuk Syed Zaid Albar

Chairman of the SC

In addition, the rules for the functioning of IEO platforms were established. Such platforms, if they operate in the country, must independently register with the agency. In addition, they must carry out the necessary checks to verify the integrity of the issuer, as well as understand the capabilities and characteristics of the token they offer.

New regulations are expected to be established in Malaysia in the second half of this year. At the first stage, SC intends to cooperate with IEO platforms on the issue of identifying satisfactory issuers.