SEC v. RYVYL, Inc., Fredi Nisan, Benzion Errez — U.S. Securities and Exchange Commission Litigation Release No. 26541, dated April 28, 2026.
The SEC charged FinTech company RYVYL, Inc., and its founders, Fredi Nisan and Benzion Errez, with making false disclosures. They claimed RYVYL offered innovative blockchain payment solutions, but in reality, it resold credit card processing services, primarily to high-risk merchants like cannabis dispensaries, without disclosing this significant business aspect.
In Plain English
Imagine a company told everyone it had a super-fast, new way to pay using special digital technology. But, in reality, it was just reselling a regular payment service that most other companies used. It also didn't tell people that many of its customers were businesses that banks usually avoid. The company and its leaders are now facing charges for not being truthful.
Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.
How the Alleged Scheme Worked
- Claiming Innovative Blockchain Technology Beginning in October 2020, RYVYL, Inc., led by CEO Fredi Nisan and Chairman Benzion Errez, falsely depicted the company in public filings as a cutting-edge financial technology firm. They claimed it developed and marketed 'innovative blockchain-based payment solutions' and that its 'proprietary blockchain-based technology' was the core settlement engine for its entire ecosystem.
- Fabricating a Digital Token RYVYL's public filings also detailed its supposed use of a digital 'token' to facilitate credit card transactions for its merchants. However, as Nisan and Errez knew, RYVYL neither sold nor possessed a functional digital token, and the technology described was purely fictional.
- Concealing the True Business Model Contrary to its public statements, RYVYL's actual business was simply reselling credit card or ACH processing services from other companies. The company never processed any transactions through blockchain technology, nor did it own any proprietary blockchain technology as claimed.
- Targeting High-Risk Merchants Until May 20, 2025, RYVYL failed to disclose that a substantial majority of its transactions involved high-risk merchants. These included businesses like cannabis dispensaries, which are often disfavored by major credit card companies due to federal legal uncertainties.
- Misleading Investors By falsely portraying RYVYL as a blockchain innovator and concealing the significant risks associated with its customer base, the defendants defrauded the investing public. These actions violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5.
- Violating Filing Requirements RYVYL also violated Exchange Act Rules 12b-20, 13a-1, 13a-11, and 13a-13 by filing materially misleading registration statements and reports (Forms S-1, 10-K, 10-Q, 8-K). Nisan and Errez aided and abetted these violations.
The Enforcement Action
On April 27, 2026, the SEC filed a settled action against RYVYL, Inc., Fredi Nisan, and Benzion Errez. RYVYL, Nisan, and Errez consented to final judgments, subject to court approval, permanently enjoining them from violating antifraud provisions. RYVYL is permanently enjoined from violating Section 13(a) and related rules. Nisan and Errez are permanently enjoined from aiding and abetting such violations. Nisan and Errez will pay civil penalties of $230,464 and are prohibited from serving as an officer or director of a public company for five years.
Named in this action: RYVYL, Inc., Fredi Nisan, Benzion Errez.