fbpx

If you’re a criminal or a hacker—then you are probably well-versed on digital currencies.

However, given the recent success of bitcoin and some other alt. currencies, we’ve seen an influx of fraud in the space, an attempt to lure in unsophisticated investors.

And that’s why I want to help bring awareness to you, so you can avoid getting duped like some of the investors you’ll read about.

Today you’ll learn how one cryptocurrency company “stole” $42.5M from its investors.

Not only was the initial coin offering (ICO) illegal—the company didn’t even file for registration. That means whoever invested their cash into it— just watched it evaporate.

This case had the New York Attorney General Letitia James feathers ruffled.

Speaking out about the case she said, “My office won’t allow white-collar criminals to get away with their schemes to defraud innocent victims, no matter how complex”. Good thing the NY Attorney General delivered on her promise.

 

How One Cryptocurrency Company Defrauded Investors

Eran Eyal is the CEO and founder of the startup UnitedData, a US blockchain company. This business ran under the name Shopin.

Eran is a well-traveled man, who currently lives in New York, and has citizenship in both South Africa and Israel. Beyond him being a traveling man looking for love, a fitness fanatic, CEO, and founder of several companies… when the U.S. Securities and Exchange Commission came knocking, he crumbled.

When Eran’s wrong doings caught up to him in 2019, his past came back to haunt him.

During the period of August 2017 to April 2018, Eran served as Shopin’s CEO, and his company conducted unregistered and fraudulent offerings of a digital securities or ICO. They raised a whopping $42.5 million by defrauding investors.

How?

By telling potential investors Shopin would create a universal shopper profile. The company would track consumers’ purchase history through multiple online retailers and then its “state-of-the-art” technology would recommend products based off its findings. It was pitched as the decentralized version of Amazon.com (AMZN).

The whole idea sounds amazing at first right?

But when you conduct due diligence… you’ll realize there were red flags all over the place.

During the time Eran and Shopin spent raising funds, they would often omit and lie about the ICO.

Eran and Shopin had a 2-step fraud process for its unregistered offering. 

  • First, they had a pre-sale of tokens to the crème dela crème, to both individuals and organizations, all that mattered was how wealthy they were.
  • Second, the sale of tokens to the regular joe during the initial coin offering, which began and ended spring 2018.


In both these stages, the Shopin token represented investment securities. Despite being a globetrotter Eran thankfully never tried to market outside the U.S.

Shopin conducted an ICO and the tokens brought in $42.5 million. However, it wasn’t mentioned that it was an illegal offering. Heck, the company never even filed for registration.

There were 4 major instances of Eran Eyal and Shopin misrepresenting or flat out lying about the Shopin tokens to investors. 

  1. The Shopin application already had two successful pilots at major retailers.
  2. Shopin already had ongoing partnerships with many major retailers and was getting monthly checks cut from them.
  3. A renowned Silicon Valley blockchain entrepreneur was an advisor to Shopin and in the company’s marketing materials.
  4. A successful online company invested in Shopin.


All 4 statements were bold face lies Eran preached to investors, telling them Shopin was the next big thing.

The CEO Took At Least $500K For His Personal Pleasure

After the capital raise, Eran Eyal took money from his already struggling company and instead of trying to right his wrongs… he went off to retail therapy. Taking at least $500,00 for his personal pleasure.

Eran had an extravagant lifestyle, a life that could only improve with a lover. His misappropriated funds went to dating service… because who needs to meet someone the old fashion way, like a non-thieving law-abiding citizen.

With his stolen funds, Eyal lived in a luxury 2-bedroom apartment in Williamsburg, went to luxury fitness centers and hired personal trainers. Moreover, he took not 1, but 2 vacations to Paris and Antigua. Bought tickets to swanky to philanthropic events. All with Shopin investor’s money.

It Wasn’t Eyal’s First Rodeo

This was not Eran Eyal’s first time playing the scumbag. It wasn’t his second go at it either. This was his third time defrauding investors.

It only took a little digging to discover it.

Prior to Shopin was the failed company Passo which Eran claimed to have been CEO of and his track record stayed the same ── lying his face off. Before that company there was Springleap. This company was less about lying and more about hiring hackers and buying likes. He is receiving 2 counts of fraud for his shady involvement in his earlier companies.

With this track record, a seasoned and successful investor could’ve seen through the crap and seen Eran Eyal for what he was── a criminal.

Eran Eyal plead guilty to all 3 charges this month. 2 counts of scheming to defraud and 1 count of felony securities fraud.

He stepped down at once from Shopin and was demanded to forfeit all cryptocurrency he still had to benefit the people he scammed. A total amounting to just under half a million. He is to pay $125,000 in restitution and $475,00 in judgements to investors of his first company, Springleap. Not only that, but he is banned from crowdfunding or being an officer in any business in New York for three years.

Good riddance!

The Stock and Options Market Are Still Riddled With “Scum”

We all know the cryptocurrency market is dirty. But did you know the options and stock market is filled with inside traders?

That’s right, the markets you and I trade day in, day out has some pretty scummy insiders who place bets on illegal information. However, what these insiders don’t know is the fact there are scanners designed to detect their every move.

These Wall Street insiders have figured out a way to covertly trade based off proprietary information through the options market… so it’s made the SEC’s job a heck of a lot harder. Let me show you how it all works.

They place massive options bets… and all I need to do is look at the order flow and pair it with a bullish chart pattern. No, it’s not illegal because I don’t know the information!

For example, I recently spotted unusual bullish options activity in Lumber Liquidators (LL)… 

 

The “insiders” knew a bullish catalyst was going to hit… and just a few days later, here’s what happened with the trade.

 

 

That was good for a near 100% winner!

The thing is… trades like these are all over the place in the market… all you have to do is look for the clues. If you want to profit from Wall Street’s greed, then click here to learn about the strategy I use to take advantage of their every move.

Author: Kyle Dennis

Straight outta college Kyle Dennis taught himself to trade, and then made over $7 million in trading profits by the time he was 28 years old. Kyle reveals how to find, track, and profit from lucrative trades for exceptional profits. Thousands of traders follow him every day to learn how to target these high probability trades.

Learn More

Leave your comment

Related Articles: