Israeli entrepreneur Moshe Hogeg sued for fraud once more
Yet another lawsuit against Israeli blockchain entrepreneur
Moshe Hogeg and his Gibraltar-incorporated crypto company STX Technologies
Ltd., also known as Stox, has been filed with the Tel Aviv District Court.
In the NIS 5 million (approximately $1.4 million) lawsuit,
reviewed by Calcalist, a Canadian citizen, Brad Mills, alleged Stox is a sting
operation disguised as a business venture.
In addition to Hogeg and Stox, Mills is also suing former
Stox CEO Yossi Peretz and one of its co-founders Ophir Gertner, as well as two
other companies owned by Hogeg, venture capital firm Singulariteam Ltd. and
gaming company Commologic Ltd.
This is not the first time Hogeg and companies or people
associated with him are being sued for similar reasons. In January 2019, a
Chinese investor filed a similar lawsuit, demanding NIS 17 million (approximately
$4.6 million at the time) in damages. The lawsuit was later dropped following a
mitigation process.
Later that year, an American investor sued Hogeg in Seattle,
alleging he misappropriated investor money to fund his acquisition of Israeli
soccer team Beitar Jerusalem Football Club, a real estate deal in Kfar
Shmaryahu, an affluent Tel Aviv suburb, and a donation to Tel Aviv University
(TAU), which subsequently named a research institute after Hogeg.
Founded in 2013 as a subsidiary of Invest.com, Stox raised
$34 million in an ICO of its namesake digital coin in August 2017. On its
website, Stox presents itself as an open-source, Ethereum-based prediction
market, in which the entrance fee for a prediction or wager is a single Stox
token.
In his lawsuit, Mills claimed he invested over $1 million
worth of digital currency ether in Stox, before learning the project was
fraudulent.
According to the lawsuit, the defendants diluted the value
of the Stox coin by distributing 22.5% of the coins that were meant to remain
locked, contrary to their previous commitments. Stox was ultimately shut down
in October 2018, letting all of its employees go, at the instruction of the
defendants, the lawsuit further alleged.
"Recently, information regarding serious irregularities
concerning investor funds has reached the plaintiff, indicating the project's
coffers were emptied out for the personal benefit of Hogeg and the other
defendants,” the lawsuit stated. The lawsuit mentioned among these private uses
“Hogeg’s lavish lifestyle that includes the purchase of expensive real estate,
luxury cars, private jets, and soccer team Beitar Jerusalem, as well as
donations to public institutions meant to glorify his name.”
Mills also claimed that when he approached Hogeg about his
conduct, the Israeli entrepreneur assured him Stox was a sure investment and
attempted to convince him to invest further. Mills also claimed that, in a
private conversation, Gertner admitted he was not forthcoming with investors
and that Hogeg is completely in charge of the project.
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