Initial coin offerings have been on the SEC’s radar for some time now. Numerous operators have found themselves in legal trouble for trying to make a quick buck.
The latest project to fall victim to the SEC is known as Shopin.
SEC Flags Another Initial Coin Offering
The entrepreneur responsible for launching this project has raised over $42m during the ICO.
By selling unregistered securities in the form of Shopin tokens, the team has committed fraud.
The purpose of this token is to create universal shopper profiles maintained on a native blockchain.
Furthermore, these profiles would be used to track customer purchase histories and recommend products accordingly.
The SEC also argues how investors were lied to, as the partnership with major retailers never materialized.
Moreover, some of the ICO funds were misappropriated by the entrepreneur, as roughly US$500,000 was used for personal expenses.
Whether any of the other funds raised during the ICO has gone missing, is unclear at this time.
In most cases, fraudulent ICOs can never return investor’s money for a wide variety of purposes.
Keeping that in mind, it seems unlikely that anyone buying Shopin tokens will see their money back in the foreseeable future.
This new lawsuit by the SEC continues to illustrate how much of a “Wild West” the ICO industry has been in recent years.
Slowly but surely, that situation is coming to an end.