According to recent reports, Stox, the blockchain prediction market based in Israel, and its founder Moshe, have been sued for more than $4.6 million by a Chinese investor over alleged fraud. The news was initially reported by The Times Israel on Friday. It stated that Zhewen Hu, a Chinese investor, filed a lawsuit against Stox in the Tel Aviv District Court on the 24th of January 2018. The suit stated that Stox founder, Hogeg, misappropriated millions in cryptocurrencies that were invested in his company. CTech reported that Yaron Shalem who is the former CFO of Singulariteam Ltd, a venture capital firm owned by Hogeg, is a defendant.
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In the filing, Hu claimed that he invested about $3.8 million in ETH in Stox after he was convinced that his investment would be added to the $30 million target the company needed to boost the platform and the price of its tokens. He believes his funds and the funds of other investors have been misappropriated rather than being used to develop the platform as was stated in the whitepaper.
In August 2018, Stox was able to raise $34 million from an initial coin offering round which was promoted by Floyd Mayweather, the well-known boxing champion. This was $4 million higher than its target. Out of the $34 million, Hogeg is being accused of investing only $5 million in Stox. Shortly after, however, Floyd Mayweather Jr got into trouble with the SEC for not revealing that he was paid to promote several initial coin offerings including that of Stox. The issue was resolved in November. Hogeg allegedly invested the remaining $29 million in other businesses and initial coin offerings. Hogeg is also being accused of selling his Stox tokens before the date he said he would. This damaged the value of the tokens that investors still had at the time. Hogeg, has denied all the charges against him and is ready to face trial.
Hogeg Has A History Of Being Sued
Hogeg Has A History Of Being Sued
Keep in mind that Hogeg is one of the founders of Sirin Labs. Sirin Labs is the company that developed a blockchain-based smartphone. Hogeg is also a chairman at LeadCoin. LeadCoin is a business lead sharing network that is based on blockchain technology. In August 2018, he purchased a Jerusalem football club, Beitar for about $7 million.
This isn’t the first time the CEO is being sued. In 2017, he was accused of stripping assets off a binary options thus making it insolvent. Right after he was sued, he countersued.
About Stox Stox is an Ethereum based prediction market that allows users to predict and generate portions of stakes for specific events. Users combine individual knowledge with wisdom from the crowd to predict the outcome of events in various categories. The predictions aren’t limited to the blockchain or cryptocurrency industry. It can be about traditional finance, weather, sports, etc. Users have the opportunity to earn money from the website if their predictions are correct.
Considering Moshe Hogeg’ history, do you think he will counter-sue or pay the money being requested as settlement to Hu? Share your thoughts.
Max writes about blockchain projects and regulation with a special focus on United States and China. He joined Smarterum after years of writing for various media outlets.
