Fraud, Fake Partnerships and a Past Revealed: The Shopin Story
The pilot program that Shopin claimed to have with Bed, Bath and Beyond appears to have never existed.
We reported on an alleged syndicate hack of the Shopin ICO last month. In that article we questioned why Shopin was being less than transparent about the situation but for the most part assumed that the hack had happened. But after its CEO Eran Eyal was arrested for his connection to an alleged fraud with his previous venture SpringLeap, we now have our doubts.
One of Shopin’s biggest selling points was its alleged pilot programs with Bed, Bath and Beyond and Italian designer Ermenegildo Zegna. With all the attention, I decided to check up on these partnerships and see if they exist. While Ermenegildo Zegna never got back to us, we can confirm that Shopin never had a pilot program or did any business with Bed Bath and Beyond.
In an emailed statement to CoinJournal a representative of Bed Bath and Beyond stated “We have reviewed our records and have not located any records indicating that we ran a pilot program or did any business with Shopin”
I went back to Shopin and asked them for a comment. At this point they seemed less confident in the existence of these pilot programs.
“These pilots relate to Passo, a pre-cursor to Shopin. We do know that Steven Gray, CEO of Passo, had successfully secured a number of pilots during the lifespan of Passo, and purportedly these pilots were among them based on representations made by Mr. Gray as well as other indicia. Unfortunately, however, we are not able to definitively confirm or deny the veracity of the existence of these pilots, as indications several months ago that seemed to support their existence are being critically re-examined.” [emphasis added]
I went back to Bed Bath and Beyond and asked them about Passo, and their answer was remarkably similar to their answer about Shopin.
“We have reviewed our records and have not located any records indicating that we ran a pilot program or did any business with Passo.”
I went back to Shopin with this information but they failed to answer my question about the lack of partnership with Bed Bath and Beyond.
The pilot studies were used to show that Shopin is already proving their model and is being looked at by major retailers. Since Shopin’s business model is focused on personalized shopping suggestions, retailer participation is important for its success. While we were unable to confirm or deny Zegna’s involvement it seems unlikely at this point that they are. If Eran Eyal had legitimate partnerships with large companies, it wouldn’t make sense to lie about partnerships of other companies when one lie would be enough to hurt your reputation and possibly put those partnerships at risk.
During the speech he states unequivocally that 504,000 users signed up through Bed Bath and Beyond and “Completed the entire Shopin onboard process” generating $13 million in sales.
Eran also claimed to be the CEO of Passo. It seems unlikely that the CEO of Passo and the CEO of Shopin would be somehow misled into thinking his company (or companies) have a pilot program with a retailer as significant as Bed, Bath and Beyond and generated $13 million in revenue for them. Eran and the other sometimes CEO of Passo, Steven Gray, faced a lawsuit over Passo. Eran was eventually dropped from the lawsuit for undisclosed reasons while Gray was ordered to pay $350,000.
That lawsuit was brought by Swiss investment company Abreziel Holdings who contended that Passo, like Shopin, misrepresented their relationships with a large retailer, according to Leagle.com
“Specifically, Abreziel alleged that Passo had deliberately lied in claiming that it had secured an 18-month trial agreement with Macy’s, and that Abreziel had relied on that misrepresentation in deciding to invest.”
For Shopin’s part, they have announced a new co-CEO to work with Eran Eyal who, despite earlier reports, is apparently still heading up Shopin. In an announcement, Shopin called the charges against Eran Eyal as “unfounded.” However, he hasn’t been seen since his arrest and 175 ETH seems to have been moved from the Shopin wallet. He has not responded directly to emails, preferring instead to have our inquiries go through a third party PR firm.
In the email where they neglected to answer my questions about the Bed Bath and Beyond pilot, they did take time to explain where Eran Eyal has been.
“Eran was released [from jail] weeks ago. No Shopin funds were used to for bail. The ETH is being used to run the business and the company continues to be managed with the utmost care and professionalism. To that end, Shopin has promoted Jennifer Haggerty to the role of co-CEO as the company continues to chart a course towards commercial deployment.”
Inside the Telegram chat speculation is going wild. What remains of the Shopin team is doing little to combat it. They have been largely uncommunicative, only popping in to say that they are restructuring and that an announcement will come soon. Many in the chat question if the alleged Syndicate hack we previously covered even happened.
As for the promised coin swap, that still has not occurred. There has yet to be a date set.
Text were posted, allegedly from Eran Eyal trying to reassure an investor. In it, he reiterates the Passo and Bed Bath and Beyond partnership. He also stated that the moved ETH was used to pay employees and continue development on Shopin. We have not independently verified those texts. But, I had not revealed the Passo explanation to the chat before the alleged texts were posted, so it appears to match up.
With one company working its way through the court system, fraud charges and claimed partnerships that don’t exist, things aren’t looking good for Eran Eyal and Shopin. There seems to be little for investors to do except file reports with the authorities and demand their money back.