# Case 3:26-cv-02672-WQH-MMP > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3Ad906e51fcae0cefc ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text Case 3:26-cv-02672-WQH-MMP 1 2 3 4 5 6 7 Document 1 Filed 04/27/26 PageID.1 Page 1 of 17 DONALD W. SEARLES (Cal. Bar No. 135705) Email: searlesd@sec.gov MARC J. BLAU (Cal. Bar No. 198162) Email: blaum@sec.gov Attorneys for Plaintiff Securities and Exchange Commission Brent Wilner, Associate Director Stephen Kam, Supervisory Trial Counsel 444 S. Flower Street, Suite 900 Los Angeles, California 90071 Telephone: (323) 965-3998 Facsimile: (213) 443-1904 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 13 14 SECURITIES AND EXCHANGE COMMISSION, Plaintiff, 15 16 17 18 19 Case No. '26CV2672 WQHMMP COMPLAINT vs. RYVYL, INC., FREDI NISAN, and BENZION ERREZ, Defendants. 20 21 22 23 24 25 26 27 28 1 Case 3:26-cv-02672-WQH-MMP 1 2 Filed 04/27/26 PageID.2 Page 2 of 17 Plaintiff Securities and Exchange Commission (“SEC” or “Commission”) alleges: 3 4 Document 1 JURISDICTION AND VENUE 1. The Court has jurisdiction over this action pursuant to Sections 20(b), 5 20(d)(1), and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 6 77t(b), 77t(d)(1), and 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e), and 27(a) of 7 the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78u(d)(1), 8 78u(d)(3)(A), 78u(e), and 78aa(a). 9 2. The defendants have, directly or indirectly, made use of the means or 10 instrumentalities of interstate commerce, of the mails, or of the facilities of a national 11 securities exchange in connection with the transactions, acts, practices and courses of 12 business alleged in this complaint. 13 3. Venue is proper in this district pursuant to Section 22(a) of the Securities 14 Act, 15 U.S.C. § 77v(a), and Section 27(a) of the Exchange Act, 15 U.S.C. § 78aa(a), 15 because certain of the transactions, acts, practices and courses of conduct constituting 16 violations of the federal securities laws occurred within this district. In addition, 17 venue is proper in this district because the individual Defendants reside in this 18 district, and Defendant RYVYL, Inc. has its principal place of business in this 19 district. 20 21 SUMMARY 4. This matter concerns a multi-year course of fraudulent conduct by which 22 RYVYL Inc. (“RYVYL”), its chief executive officer, Fredi Nisan (“Nisan”) and its 23 chairman of the board, Benzion Errez (“Errez”) defrauded the investing public by 24 falsely depicting RYVYL in its public filings with the Commission as a cutting edge 25 “financial technology company that develops, markets, and sells innovative 26 blockchain-based payment solutions” and that its “proprietary blockchain-based 27 technology serves as the settlement engine for all transactions within [its] 28 ecosystem.” 2 Case 3:26-cv-02672-WQH-MMP 1 2 5. Document 1 Filed 04/27/26 PageID.3 Page 3 of 17 RYVYL’s public filings also detailed its use of a digital “token” to facilitate credit card transactions with merchants using its services. 3 6. As Nisan and Errez knew, or were reckless in not knowing, these 4 descriptions of the company’s business were materially false and misleading. 5 RYVYL’s actual business was reselling credit card or ACH processing services of 6 other companies to high-risk merchants, such as cannabis dispensaries. RYVYL 7 never processed any transactions through a blockchain as it claimed in its public 8 filings, nor did it possess any proprietary blockchain technology. Despite specifically 9 describing its use in transactions, RYVYL neither sold nor had a functional digital 10 token. 11 7. Moreover, until its May 20, 2025 quarterly filing, RYVYL never 12 publicly disclosed that a substantial majority of its transactions involved high-risk 13 merchants, such as cannabis dispensaries, which are disfavored customers by most 14 major credit companies due to the questionable legality of their businesses under 15 federal law. 16 8. By engaging in this conduct RYVYL, Nisan, and Errez violated Section 17 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 18 thereunder. In addition, RYVYL, by filing a materially misleading registration 19 statement, and materially misleading annual, quarterly and current reports with the 20 Commission on Forms S-1, 10-K, 10-Q and 8-K, violated Exchange Act Rules 12b- 21 20, 13a-1, 13a-11, 13a-13, and Nisan and Errez aided and abetted RYVYL’s 22 violations of those rules. 23 9. The SEC requests that the Court impose permanent injunctions against 24 each of the Defendants for their respective violations of the federal securities laws; 25 prohibit Nisan and Errez from acting as an officer or director of any issuer that has a 26 class of securities registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. § 27 78l, or that is required to file reports pursuant to Section 15(d) of the Exchange Act, 28 78 U.S.C. § 78o(d), pursuant to Section 20(e) of the Securities Act and Section 3 Case 3:26-cv-02672-WQH-MMP Document 1 Filed 04/27/26 PageID.4 Page 4 of 17 1 21(d)(2) of the Exchange Act; and impose civil money penalties against Nisan and 2 Errez pursuant to Section 21(d)(3) of the Exchange Act and Section 20(d) of the 3 Securities Act. 4 5 THE DEFENDANTS 10. RYVYL Inc. is a Nevada corporation, with its principal place of 6 business in San Diego, California. The company provided payment processing 7 services and point-of-sale software to its merchant clients. Founded by Nisan and 8 Errez in 2018 as GreenBox POS, LLC (“GreenBox”), the company began trading 9 shares on the OTC markets under the ticker symbol “GBOX” following a reverse 10 merger in April 2018 and was subsequently uplisted to NASDAQ in 2021. In 11 October 2022, the company changed its name to RYVYL and its ticker symbol to 12 “RVYL.” In September 2025, RYVYL entered into an agreement and plan of merger 13 with RTB Digital Inc. (“RTB”), a privately held media technology company, which 14 was approved by a special meeting of RYVYL’s shareholders held on April 1, 2026. 15 Pursuant to the terms of the merger agreement, a wholly-owned subsidiary of 16 RYVYL will merge with and into RTB, with RTB surviving as a wholly-owned 17 subsidiary of RYVYL. After the completion of the planned merger, RYVYL will be 18 renamed RTB Digital, Inc., and expects to trade on NASDAQ under the symbol 19 “RTB.” The company’s common stock is registered pursuant to Section 12(b) of the 20 Exchange Act. 21 11. Fredi Nisan, age 44, is a resident of San Diego, California. Nisan is a 22 co-founder of RYVYL and was the company’s chief executive officer from 2017 to 23 October 31, 2025, when he stepped down from the position. 24 12. Benzion Errez, age 65, is a resident of Escondido, California. Errez is a 25 co-founder of RYVYL and acted as the chairman of the board and executive vice 26 president of the company from July 2017 to August 2025, when he stepped down 27 from those positions. 28 4 Case 3:26-cv-02672-WQH-MMP Document 1 1 THE ALLEGATIONS 2 A. 3 4 Filed 04/27/26 PageID.5 Page 5 of 17 RYVYL Claimed In Its Public Filings That It Owned Proprietary Blockchain Technology That Effectuated Merchant Transactions. 13. In its S-1 registration statement filed with the Commission on October 2, 5 2020, RYVYL claimed to be “a tech company formed with the intent of developing, 6 marketing and selling innovative blockchain-based payment solutions” and that its 7 “proprietary, blockchain-based systems are designed to facilitate, record and store a 8 virtually limitless volume of tokenized assets, representing cash or data, on a secured, 9 immutable blockchain-based ledger.” 10 14. RYVYL’s registration statement further claimed that its “proprietary 11 blockchain-based technology serves as the settlement engine for all transactions 12 within the Company’s ecosystem” and that “[u]nlike general blockchain-based 13 systems [RYVYL] uses proprietary, private ledger technology to verify every 14 transaction conducted within the [RYVYL] ecosystem.” 15 15. RYVYL also claimed that transactions on its ecosystem start with the 16 consumer purchasing tokens issued by the company, which are loaded onto a “virtual 17 wallet” allowing the “transaction experience to seem like any other ordinary 18 credit/debit card transaction to the consumer and the merchant.” 19 16. From October 2, 2020 to May 10, 2025 (the “Relevant Period”) 20 RYVYL’s description of its business in its annual, quarterly and current reports filed 21 with the Commission remained substantially similar to the description appearing in 22 its October 2, 2020 S-1 registration statement. 23 17. For example, in Forms 10-K for fiscal years 2020 through 2025, 24 RYVYL stated that it was a “financial technology company that develops, markets, 25 and sells innovative blockchain-based payment solutions;” its “proprietary, 26 blockchain-based systems are designed to facilitate, record and store a virtually 27 limitless volume of tokenized assets, representing cash or data, on a secured, 28 immutable blockchain-based ledger” and “serves as the settlement engine for all 5 Case 3:26-cv-02672-WQH-MMP Document 1 Filed 04/27/26 PageID.6 Page 6 of 17 1 transactions within our ecosystem;” and it uses its “proprietary, private ledger 2 technology to verify every transaction conducted within our ecosystem.” 3 18. RYVYL further explained that “[w]hen consumers use credit/debit cards 4 to pay for transactions with merchants who use our ecosystem, the transaction starts 5 with the consumer purchasing tokens from us. The tokens are purchased or granted 6 directly from the merchant’s terminals or mobile app, or from our website and are 7 immediately available for transactions.” RYVYL stated that “[s]ecure tokens are 8 used where users need an immediate transaction, in a safe, private, and secure 9 environment, and where traditional banks may not work effectively, like cross-border 10 transactions or in under-banked verticals.” 11 19. Similarly, RYVYL’s Forms 10-Q repeatedly asserted that RYVYL is a 12 “tech company formed with the intent of developing, marketing and selling 13 innovative blockchain-based payment solutions, which the Company believes will 14 cause favorable disruption in the payment solutions marketplace. The Company’s 15 core focus is to develop and monetize disruptive blockchain-based applications, 16 integrated within an end-to-end suite of financial products, capable of supporting a 17 multitude of industries. The Company’s proprietary, blockchain-based systems are 18 designed to facilitate, record and store a virtually limitless volume of tokenized 19 assets, representing cash or data, on a secured, immutable blockchain-based ledger.” 20 20. Many of RYVYL’s press releases filed on Forms 8-K with the 21 Commission during the Relevant Period also included a description of RYVYL’s 22 business in which it claimed that it leverages proprietary blockchain security and 23 token technology and represented that its applications enable an end-to-end suite of 24 turnkey financial products with enhanced security and data privacy, world-class 25 identify theft protection and repaid speed to settlement thereby improving the 26 efficiency of handling large-scale commercial processing volumes for its merchant 27 clients. 28 6 Case 3:26-cv-02672-WQH-MMP 1 B. 2 3 Document 1 Filed 04/27/26 PageID.7 Page 7 of 17 The Statements In RYVYL’s Public Filings Were Materially Misleading. 21. In repeatedly describing itself in its public filings as a provider of 4 “blockchain-based payment solutions,” RYVYL made a series of materially 5 misleading statements about the nature of its business. 6 7 1. 22. RYVYL did not conduct any transactions on a blockchain. Contrary to what it repeatedly stated in its public filings during the 8 Relevant Period, RYVYL did not effectuate any transactions on a blockchain. 9 Rather, RYVYL acted as an independent sales organization providing standard credit 10 card and ACH processing services to merchants through third-party processors, none 11 of whom used blockchain technology to effectuate transactions. 12 23. Similarly, none of the independent sales organizations that RYVYL had 13 acquired had any blockchain component in their processing. Rather, they all 14 employed traditional methods to process credit card transactions, i.e., using a gateway 15 processing agent affiliated with a bank. 16 24. Although one of RYVYL’s products – the QuickCard Payment System, 17 product, which RYVYL described as a comprehensive physical and virtual cash 18 management system – recorded transactions to a private blockchain after a bank or 19 other card processor approved the transaction, RYVYL failed to disclose that the 20 underlying consumer-merchant transactions were conducted outside of RYVYL’s 21 private blockchain, just like any standard credit or debit transaction. In fact, neither 22 the merchant nor the customer had any access to the private blockchain or any 23 interaction with it. 24 25. QuickCard transactions were recorded to both RYVYL’s private 25 blockchain and a standard structured query language (“SQL”) database. It was the 26 SQL database, and not RYVYL’s private blockchain, that was used to support the 27 QuickCard software used by merchants tracking their sales data. 28 7 Case 3:26-cv-02672-WQH-MMP 1 2 2. 26. Document 1 Filed 04/27/26 PageID.8 Page 8 of 17 RYVYL did not own any proprietary blockchain technology. Despite repeated references in its public filings and press releases to 3 “proprietary blockchain security,” RYVYL did not actually own the technology 4 behind the private blockchain that it used to record QuickCard transactions. 5 27. The private blockchain that RYVYL used in connection with QuickCard 6 was developed by a third-party software development company. RYVYL did not 7 even have a license to that technology. Nor did RYVYL employ any software 8 developers with blockchain development experience. 9 3. 10 11 RYVYL did not conduct any transactions using a digital token. 28. RYVYL’s public filings contained detailed descriptions of how 12 customers purchase digital tokens from RYVYL to conduct credit or debit 13 transactions—a description included in multiple public filings since October 2020. 14 15 29. the use of tokens to conduct credit or debt transactions. 16 4. RYVYL made materially misleading claims about its diversified 17 18 However, RYVYL never actually implemented a system that facilitated customer base. 30. In its Form 10-K for fiscal year 2024, RYVYL touted its strategic 19 approach to industry diversification as a core component of its growth and risk 20 management framework. As RYVYL explained, “[b]y targeting a broad spectrum of 21 industries – from traditional sectors like retail and financial services to high-growth 22 areas such as e-commerce, technology and digital marketplaces – we effectively 23 minimize reliance on any single market segment. This diversified focus not only 24 reduces our exposure to sector-specific risk but also positions RYVYL to capitalize 25 on emerging opportunities across the global economy.” RYVYL also claimed that it 26 processed transactions for approximately 1,500 business customers in North America, 27 Europe and Asia, and in over 50 industries. 28 31. RYVYL’s claims about its diversified customer base and reduced 8 Case 3:26-cv-02672-WQH-MMP Document 1 Filed 04/27/26 PageID.9 Page 9 of 17 1 exposure to sector-specific risk were materially misleading because it did not disclose 2 that its principal product, QuickCard, was exclusively promoted to, and used by, 3 cannabis dispensaries. 4 32. Relatedly, in its Form 10-K for fiscal year 2023, RYVYL reported that 5 in February 2024 it transitioned its QuickCard product in North America away from 6 terminal-based to app-based processing and further reported that this transition 7 “coincided with a change in our banking partner that was prompted by recent changes 8 in the compliance environment and banking regulations.” RYVYL stated that “the 9 unforeseen abrupt nature of the transition” led to a significant decline in processing 10 volume in North America and that management anticipated consolidated revenue for 11 the first quarter of 2024 to be down sequentially by approximately 30 percent overall. 12 33. These statements were also materially misleading. In reality, the reason 13 RYVYL’s relationships with its banking partners were terminated was RYVYL’s 14 involvement with cannabis merchants, which its banking partners expressly 15 prohibited. 16 34. Due to federal laws against cannabis sales, Visa, Mastercard, and 17 American Express all prohibit the use of their cards for cannabis sales and prohibit 18 associated banks and gateways from processing those transactions. 19 35. RYVYL’s failure to disclose that its primary product, QuickCard, was 20 primarily marketed to and used by cannabis dispensaries made the company’s 21 statements about its diversified payment processing business incomplete and 22 materially misleading. 23 C. RYVYL’s Misstatements Were Material. 24 36. Each of the aforementioned misrepresentations would have been 25 material to a reasonable investor in making his or her investment decisions. RYVYL 26 consistently marketed itself to investors as “a tech company formed with the intent of 27 developing, marketing and selling innovative blockchain-based payment solutions.” 28 37. However, it did none of these things. As a result, it would have been 9 Case 3:26-cv-02672-WQH-MMP Document 1 17 Filed 04/27/26 PageID.10 Page 10 of 1 important to a reasonable investor to know that RYVYL did not in fact process any 2 transactions on a blockchain, or own proprietary technology to do so. 3 38. Moreover, it would have been important to a reasonable investor to 4 know that QuickCard was primarily used to facilitate cannabis transaction because 5 this was a material risk to the company’s revenues. 6 D. RYVYL’s Public Filings. 7 8 Nisan And Errez Were Both “Makers” Of The Statements In 39. During the Relevant Period, due to their roles, both Nisan and Errez had 9 ultimate authority over the content of RYVVYL’s Forms S-1, 10-K, 10-Q, and 8-K, 10 as well as the decision to file them with Commission. 11 12 13 14 15 16 17 18 19 40. Commission during the Relevant Period. 41. Nisan signed RYVYL’s annual and quarterly reports filed with the Commission on Forms 10-K and 10-Q during the Relevant Period. 42. Errez signed RYVYL’s annual reports filed with Commission on Forms 10-K during the Relevant Period. 43. Nisan and/or Errez also signed RYVYL’s Forms 8-K filed with the Commission during the Relevant Period. E. 20 21 Both Nisan and Errez signed RYVYL’s Form S-1 filed with the Nisan And Errez Acted With Scienter, Which Is Imputed To RYVYL 44. Both Nisan and Errez knew, or were reckless in not knowing, that 22 RYVVL’s description of its business in its public filings for the Relevant Period was 23 materially misleading. Specifically, they each knew, or were reckless in not 24 knowing, that: 25 (a) 26 None of RYVYL’s payment processing was effectuated on a blockchain; 27 (b) RYVYL did not own any proprietary blockchain technology; 28 (c) RYVYL never sold digital tokens to customers to facilitate credit 10 Case 3:26-cv-02672-WQH-MMP 1 Document 1 17 Filed 04/27/26 PageID.11 Page 11 of card transactions; 2 (d) 3 RYVYL’s principal product, QuickCard, was primarily used by cannabis dispensaries; 4 (e) Because of federal laws against cannabis sales, Visa, Mastercard, 5 and American Express all prohibited the use of their cards for 6 cannabis sales and prohibited associated banks and gateways from 7 processing those transactions; and 8 (f) Failing to disclose that RYVYL’s primary business product, 9 QuickCard, was mainly marketed to and used by cannabis 10 dispensaries rendered the company’s statements about its revenue, 11 diversified customer base, and the need to maintain its banking 12 relationships materially incomplete and misleading. 13 14 15 45. By engaging in this conduct, Nisan and Errez acted at least unreasonably, and therefore also acted negligently. 46. Because they engaged in their misconduct described herein while acting 16 in their capacities as RYVYL’s CEO and chairman of the board, respectively, Nisan 17 and Errez’s scienter and/or negligence may be imputed to RYVYL. 18 47. During the Relevant Period, RYVYL obtained money by means of its 19 materially misleading registration statement and annual, quarterly and current reports 20 filed with the Commission, as it periodically sold its stock to the public. 21 22 23 24 25 48. Through their conduct, and while acting as its agent, Nisan and Errez obtained money and property for RYVYL. 49. Nisan and Errez also obtained salaries, bonuses, stock awards, options awards, and other compensation from RYVYL during the Relevant Period. 50. In addition to the material misstatements and omissions of material fact 26 necessary to make the statements made not misleading in RYVYL’s public filings, 27 both Nisan and Errez engaged in deceptive acts in furtherance of RYVYL’s 28 fraudulent scheme. 11 Case 3:26-cv-02672-WQH-MMP 1 51. Document 1 17 Filed 04/27/26 PageID.12 Page 12 of In directly managing RYVYL’s operations, Nisan directed QuickCard’s 2 operations, knowing that QuickCard did not offer the “blockchain-based payment 3 solution[]” represented in the company’s public statements to investors. 4 52. Further, Nisan was directly involved with establishing banking 5 relationships that would allow QuickCard to process major credit cards, without 6 disclosing to Visa, American Express or Mastercard that the underlying sales 7 involved cannabis. 8 53. 9 Likewise, Errez signed merchant processing agreements that misrepresented the nature of the products to be sold through QuickCard. 10 FIRST CLAIM FOR RELIEF 11 Fraud in Connection with the Purchase or Sale of Securities 12 Violations of Section 10(b) of the Exchange Act and Rule 10b-5 13 (Against All Defendants) 14 54. 15 55 above. 16 55. The SEC realleges and incorporates by reference paragraphs 1 through During the Relevant Period, Defendants RYVYL, Nisan and Errez 17 falsely depicted RYVYL in its public filings with the Commission as a cutting-edge 18 technology company selling innovative and proprietary blockchain-based payment 19 solutions to a well-diversified customer base using digital tokens. In fact, none of 20 this was true. 21 56. By engaging in the conduct described above, Defendants RYVYL, Nisan 22 and Errez, and each of them, directly or indirectly, in connection with the purchase or 23 sale of a security, and by the use of means or instrumentalities of interstate 24 commerce, of the mails, or of the facilities of a national securities exchange, 25 knowingly and/or recklessly: (a) employed devices, schemes, or artifices to defraud; 26 (b) made untrue statements of a material fact or omitted to state material facts 27 necessary in order to make the statements made, light of the circumstances under 28 which they were made, not misleading; and (c) engaged in acts, practices, or courses 12 Case 3:26-cv-02672-WQH-MMP 1 2 Document 1 17 Filed 04/27/26 PageID.13 Page 13 of of business which operated or would operate as a fraud or deceit upon another person. 57. By engaging in the conduct described above, Defendants RYVYL, Nisan 3 and Errez violated, and unless enjoined will continue to violate, Section 10(b) of the 4 Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5. 5 SECOND CLAIM FOR RELIEF 6 Fraud in the Offer or Sale of Securities 7 Violations of Section 17(a) of the Securities Act 8 (Against All Defendants) 9 58. 10 55 above. 11 59. The SEC realleges and incorporates by reference paragraphs 1 through During the Relevant Period, Defendants RYVYL, Nisan and Errez 12 falsely depicted RYVYL in its public filings with the Commission as a cutting-edge 13 technology company selling innovative and proprietary blockchain-based payment 14 solutions to a well-diversified customer base using digital tokens. In fact, none of 15 this was true. 16 60. By engaging in the conduct described above, Defendants RYVYL, Nisan 17 and Errez, and each of them, directly or indirectly, in the offer or sale of securities, 18 and by the use of means or instrumentalities of interstate commerce or of the mails: 19 (a) knowingly and recklessly employed devices, schemes, or artifices to defraud; (b) 20 knowingly, recklessly and/or negligently obtained money or property by means of 21 untrue statements of material facts and omission to state material facts necessary in 22 order to make the statements made, in light of the circumstances under which they 23 made, not misleading; and (c) knowingly, recklessly and/or negligently engaged in 24 transactions, practices, or courses of business which operated or would operate as a 25 fraud or deceit upon the purchaser. 26 61. By engaging in the conduct described above, Defendants RYVYL, Nisan 27 and Errez violated, and unless enjoined will continue to violate, Section 17(a) of the 28 Securities Act, 15 U.S.C. § 77q(a). 13 Case 3:26-cv-02672-WQH-MMP Document 1 17 Filed 04/27/26 PageID.14 1 THIRD CLAIM FOR RELIEF 2 False SEC Filings 3 Violations of Section 13(a) of the Exchange Act and 4 Rules 12b-20, 13a-1, 13a-11 and 13a-13 Thereunder 5 (against RYVYL) 6 62. 7 55 above. 8 63. Page 14 of The SEC realleges and incorporates by reference paragraphs 1 through During the Relevant Period, Defendant RYVYL falsely depicted itself in 9 public filings with the Commission as a cutting-edge technology company selling 10 innovative and proprietary blockchain-based payment solutions to a well-diversified 11 customer base and using digital tokens. In fact, none of this was true. 12 64. During the Relevant Period, and as alleged above, RYVYL was an issuer 13 of securities registered pursuant to Section 12 of the Exchange Act and filed annual 14 Forms 10-K, quarterly Forms 10-Q, and current reports on Form 8-K that made 15 untrue statements of material fact or omitted to state material facts necessary in order 16 to make the statements made, in light of the circumstances under which they were 17 made, not misleading, in violation of Section 13(a) of the Exchange Act and Rules 18 12b-20,13a-1, 13a-11 and 13a-13. 19 65. By engaging in the conduct described above, Defendant RYVYL 20 violated, and unless restrained and enjoined will continue to violate, Section 13(a) of 21 the Exchange Act, 15 U.S.C. § 78m(a), and Rules 12b-20, 13a-1, 13a-11 and 13a-13, 22 17 C.F.R. §§ 240.12b-20,13a-1, 13a-11 and 13a-13. 23 FOURTH CLAIM FOR RELIEF 24 Aiding and Abetting RYVYL’s Violations of Section 13(a) of the Exchange Act 25 and Rules 12b-20, 13a-1, 13a-11 and 13a-13 Thereunder 26 (against Nisan and Errez) 27 66. 28 55 above. The SEC realleges and incorporates by reference paragraphs 1 through 14 Case 3:26-cv-02672-WQH-MMP 1 67. Document 1 17 Filed 04/27/26 PageID.15 Page 15 of During the Relevant Period, Defendants Nisan and Errez falsely depicted 2 RYVYL in its public filings with the Commission as a cutting-edge technology 3 company selling innovative and proprietary blockchain-based payment solutions to a 4 well-diversified customer base using digital tokens. In fact, none of this was true. 5 68. As alleged above, Nisan and Errez substantially assisted RYVYL’s 6 primary violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 7 13a-11 and 13a-13 by reviewing, approving, and/or signing RYVYL’s registration 8 statement and its annual, quarterly and current reports filed with the Commission on 9 Forms S-1, 10-K, 10-Q and 8-K during the Relevant Period. 10 69. Nisan and Errez knew or were reckless in not knowing that RYVYL’s 11 filings contained material misstatements and omissions when Nisan and Errez 12 reviewed, approved, and/or signed them. 13 70. By engaging in the conduct described above, Defendants Nisan and 14 Errez aided and abetted RYVYL’s violations of, and unless restrained and enjoined 15 will continue to aid and abet violations of Section 13(a) of the Exchange Act, 15 16 U.S.C. § 78m(a), and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder, 17 C.F.R. 17 §§ 240.12b-20,13a-1, 13a-11 and 13a-13. 18 19 PRAYER FOR RELIEF WHEREFORE, the SEC respectfully requests that the Court: 20 I. 21 Issue findings of fact and conclusions of law that Defendants committed the 22 alleged violations. 23 II. 24 Issue judgments, in forms consistent with Rule 65(d) of the Federal Rules of 25 26 Civil Procedure: (a) permanently enjoining RYVYL, Nisan and Errez and their officers, agents, 27 servants, employees and attorneys, and those persons in active concert or 28 participation with any of them, who receive actual notice of the judgment by personal 15 Case 3:26-cv-02672-WQH-MMP Document 1 17 Filed 04/27/26 PageID.16 Page 16 of 1 service or otherwise, and each of them, from violating Section 17(a) of the Securities 2 Act, 15 U.S.C. § 77q(a), and Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), 3 and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5; 4 (b) permanently enjoining RYVYL and its officers, agents, servants, 5 employees and attorneys, and those persons in active concert or participation with 6 any of them, from violating Section 13(a) of the Exchange Act, 15 U.S.C. § 78m(a), 7 and Rules 12b-20, 13a-1, 13a-11 and 13a-13, 17 C.F.R. §§ 240.12b-20,13a-1, 13a-11 8 and 13a-13; and, 9 (c) permanently enjoining Nisan and Errez and their officers, agents, servants, 10 employees and attorneys, and those persons in active concert or participation with 11 any of them, from aiding and abetting violations of Section 13(a) of the Exchange 12 Act, 15 U.S.C. § 78m(a), and Rules 12b-20,13a-1, 13a-11, and 13a-13, 17 C.F.R. §§ 13 240.12b-20,13a-1, 13a-11 and 13a-13. 14 III. 15 Enter an order against Defendants Nisan and Errez pursuant to Section 20(e) of 16 the Securities Act and Section 21(d)(2) of the Exchange Act, 15 U.S.C. § 77t(e) and 17 15 U.S.C. § 78u(d)(2), prohibiting them from acting as an officer or director of any 18 issuer that has a class of securities registered pursuant to Section 12 of the Exchange 19 Act, 15 U.S.C. § 78l, or that is required to file reports pursuant to Section 15(d) of the 20 Exchange Act, 78 U.S.C. § 78o(d). 21 IV. 22 Order Defendants Nisan and Errez to pay civil penalties under Section 20(d) of 23 the Securities Act, 15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 15 24 U.S.C. § 78u(d)(3). 25 V. 26 Retain jurisdiction of this action in accordance with the principles of equity and 27 the Federal Rules of Civil Procedure in order to implement and carry out the terms of 28 all orders and decrees that may be entered, or to entertain any suitable application or 16 Case 3:26-cv-02672-WQH-MMP 1 4 Filed 04/27/26 PageID.17 Page 17 of motion for additional relief within the jurisdiction of this Court. 2 3 Document 1 17 VI. Grant such other and further relief as this Court may determine to be just and necessary. 5 6 7 8 9 10 11 Dated: April 27, 2026 /s/ Donald W. Searles Donald W. Searles Attorney for Plaintiff Securities and Exchange Commission 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 Case 3:26-cv-02672-WQH-MMP Document 1-1SHEET Filed 04/27/26 PageID.18 Page 1 CIVIL COVER of 2 The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as JS 44 (Rev. 03/24) provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.) I. (a) PLAINTIFFS DEFENDANTS RYVYL, INC., FREDI NISAN, and BENZION ERREZ U.S. SECURITIES AND EXCHANGE COMMISSION (b) County of Residence of First Listed Plaintiff County of Residence of First Listed Defendant (EXCEPT IN U.S. PLAINTIFF CASES) NOTE: San Diego (IN U.S. PLAINTIFF CASES ONLY) IN LAND CONDEMNATION CASES, USE THE LOCATION OF THE TRACT OF LAND INVOLVED. '26CV2672 WQHMMP Attorneys (If Known) (c) Attorneys (Firm Name, Address, and Telephone Number) Donald W. Searles; US Securities and Exchange Steven A. Cazares, Foundation Law Group, 4100 W Commission; 444 S. Flower St, Ste 900, Los Angeles, CA Alameda Ave, 3rd Fl, Burbank, CA 91505; (323)240-5348 90071; (323) 965-3998 II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff ✖ 1 U.S. Government Plaintiff 3 Federal Question (U.S. Government Not a Party) 2 U.S. Government Defendant 4 Diversity (Indicate Citizenship of Parties in Item III) (For Diversity Cases Only) PTF Citizen of This State 1 2 2 Incorporated and Principal Place of Business In Another State 5 5 Citizen or Subject of a Foreign Country 3 3 Foreign Nation 6 6 Click here for: Nature of Suit Code Descriptions. TORTS 110 Insurance 120 Marine 130 Miller Act 140 Negotiable Instrument 150 Recovery of Overpayment & Enforcement of Judgment 151 Medicare Act 152 Recovery of Defaulted Student Loans (Excludes Veterans) 153 Recovery of Overpayment of Veteran’s Benefits 160 Stockholders’ Suits 190 Other Contract 195 Contract Product Liability 196 Franchise REAL PROPERTY 210 Land Condemnation 220 Foreclosure 230 Rent Lease & Ejectment 240 Torts to Land 245 Tort Product Liability 290 All Other Real Property PERSONAL INJURY 310 Airplane 315 Airplane Product Liability 320 Assault, Libel & Slander 330 Federal Employers’ Liability 340 Marine 345 Marine Product Liability 350 Motor Vehicle 355 Motor Vehicle Product Liability 360 Other Personal Injury 362 Personal Injury Medical Malpractice CIVIL RIGHTS 440 Other Civil Rights 441 Voting 442 Employment 443 Housing/ Accommodations 445 Amer. w/Disabilities Employment 446 Amer. w/Disabilities Other 448 Education and One Box for Defendant) PTF DEF Incorporated or Principal Place 4 4 of Business In This State Citizen of Another State IV. NATURE OF SUIT (Place an “X” in One Box Only) CONTRACT DEF 1 PERSONAL INJURY 365 Personal Injury Product Liability 367 Health Care/ Pharmaceutical Personal Injury Product Liability 368 Asbestos Personal Injury Product Liability PERSONAL PROPERTY 370 Other Fraud 371 Truth in Lending 380 Other Personal Property Damage 385 Property Damage Product Liability PRISONER PETITIONS Habeas Corpus: 463 Alien Detainee 510 Motions to Vacate Sentence 530 General 535 Death Penalty Other: 540 Mandamus & Other 550 Civil Rights 555 Prison Condition 560 Civil Detainee Conditions of Confinement FORFEITURE/PENALTY BANKRUPTCY OTHER STATUTES 625 Drug Related Seizure of Property 21 USC 881 690 Other 422 Appeal 28 USC 158 423 Withdrawal 28 USC 157 INTELLECTUAL PROPERTY RIGHTS 375 False Claims Act 376 Qui Tam (31 USC 3729(a)) 400 State Reapportionment 410 Antitrust 430 Banks and Banking 450 Commerce 460 Deportation 470 Racketeer Influenced and Corrupt Organizations 480 Consumer Credit (15 USC 1681 or 1692) 485 Telephone Consumer Protection Act 490 Cable/Sat TV 850 Securities/Commodities/ Exchange 890 Other Statutory Actions 891 Agricultural Acts 893 Environmental Matters 895 Freedom of Information Act 896 Arbitration 899 Administrative Procedure Act/Review or Appeal of Agency Decision 950 Constitutionality of State Statutes LABOR 710 Fair Labor Standards Act 720 Labor/Management Relations 740 Railway Labor Act 751 Family and Medical Leave Act 790 Other Labor Litigation 791 Employee Retirement Income Security Act IMMIGRATION 462 Naturalization Application 465 Other Immigration Actions 820 Copyrights 830 Patent 835 Patent - Abbreviated New Drug Application 840 Trademark 880 Defend Trade Secrets Act of 2016 SOCIAL SECURITY 861 HIA (1395ff) 862 Black Lung (923) 863 DIWC/DIWW (405(g)) 864 SSID Title XVI 865 RSI (405(g)) ✖ FEDERAL TAX SUITS 870 Taxes (U.S. Plaintiff or Defendant) 871 IRS—Third Party 26 USC 7609 V. ORIGIN (Place an “X” in One Box Only) ✖ 1 Original Proceeding 2 Removed from State Court 3 Remanded from Appellate Court 4 Reinstated or Reopened 5 Transferred from Another District (specify) 6 Multidistrict Litigation Transfer Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity): 8 Multidistrict Litigation Direct File Sections 20(b), 20(d)(1), and 22(a) of the Securities Act of 1933, 15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e) VI. CAUSE OF ACTION Brief description of cause: Fraudulent conduct by which RYVYL, its CEO Fredi Nisan and its chairman of the board, Benzion Errez defrauding the investing public by falsely de VII. REQUESTED IN COMPLAINT: VIII. RELATED CASE(S) IF ANY CHECK IF THIS IS A CLASS ACTION UNDER RULE 23, F.R.Cv.P. CHECK YES only if demanded in complaint: DEMAND $ JURY DEMAND: (See instructions): JUDGE DATE SIGNATURE OF ATTORNEY OF RECORD Apr 27, 2026 /s/ Donald W. Searles DOCKET NUMBER FOR OFFICE USE ONLY RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. JUDGE ✖ Yes No Case 3:26-cv-02672-WQH-MMP JS 44 Reverse (Rev. 03/24) Document 1-1 of 2 Filed 04/27/26 PageID.19 Page 2 INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44 Authority For Civil Cover Sheet The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows: I.(a) (b) (c) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and then the official, giving both name and title. County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting in this section "(see attachment)". II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X" in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below. United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here. United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box. Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes precedence, and box 1 or 2 should be marked. Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity cases.) III. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this section for each principal party. IV. Nature of Suit. Place an "X" in the appropriate box. If there are multiple nature of suit codes associated with the case, pick the nature of suit code that is most applicable. Click here for: Nature of Suit Code Descriptions. V. Origin. Place an "X" in one of the seven boxes. Original Proceedings. (1) Cases which originate in the United States district courts. Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441. Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing date. Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date. Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or multidistrict litigation transfers. Multidistrict Litigation – Transfer. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C. Section 1407. Multidistrict Litigation – Direct File. (8) Check this box when a multidistrict case is filed in the same district as the Master MDL docket. PLEASE NOTE THAT THERE IS NOT AN ORIGIN CODE 7. Origin Code 7 was used for historical records and is no longer relevant due to changes in statute. VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service. VII. Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P. Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction. Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded. VIII. Related Cases. This section of the JS 44 is used to reference related cases, if any. If there are related cases, insert the docket numbers and the corresponding judge names for such cases. Date and Attorney Signature. Date and sign the civil cover sheet. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3Ad906e51fcae0cefc. Public record. Not legal advice.