Israel-based blockchain prediction market platform Stox and its founder Moshe Hogeg are reportedly being sued by a Chinese investor for over $4.6 million over alleged fraud.
As reported in The Times of Israel on Friday, investor Zhewen Hu claims in a lawsuit, filed in the Tel Aviv District Court on Jan. 24, that Hogeg had misappropriated some of the crypto millions invested in the firm. The filing also names Yaron Shalem, former CFO at Hogeg’s venture capital firm Singulariteam Ltd. as a defendant, says CTech.
Hu said in the filing that he had invested ether cryptocurrency to the value of roughly $3.8 million in the Stox platform after being convinced by commitments in the firm’s white paper that, if it could raise $30 million in ether, it would put the total amount into developing its platform and ultimately boost the price of Stox tokens.
In August of last year, Stox’s ICO – notably promoted at the time by boxing champion Floyd Mayweather, Jr. – passed that threshold, raising $34 million, according to The Times.
However, Hu alleges that Hogeg invested just $5 million of the raised funds in Stox and invested the remainder in other ICOs and businesses. The lawsuit also claims Hogeg sold his Stox tokens before a date he had committed to hold them to, thus damaging the value of the tokens still held by investors. The Stox founder has denied any wrongdoing, the article says.
Hogeg is also a co-founder of Sirin Labs, which has built a blockchain smartphone, and chairman of LeadCoin, a blockchain-based business lead sharing network. He also notably bought Beitar Jerusalem Football Club last August 2018 for roughly $7 million.
In another lawsuit in November 2017, Hogeg was accused of stripping the assets of a binary options form, causing it to become become insolvent. He was reported to be countersuing at the time.
Last November, the U.S. Securities and Exchange Commission settled charges with Floyd Mayweather Jr. for failing to disclose that he had been paid to promote ICOs, including the offering from Stox.