In line with a recent news report by native media ‘The times of Israel’, a Chinese capitalist has sued a renowned Israeli crypto entrepreneur and his blockchain firm Stox [STX] over an alleged fraud.
The capitalist named ‘Zhewen Hu’, is suing Stox and its founder for $4.6 Mln, as per the report. Hu allegedly invested a total of around $3.8 Mln worth of Ethereum [ETH] within the blockchain firm which is a open source Ethereum based prediction market platform referred as ‘Stox’, founder by Moshe Hogeg.
Hogeg is very well-known for his multiple cryptocurrency-related ventures — that ‘embrace‘ founding blockchain smartphone developer Sirin Labs, and serving as chairman of LeadCoin, a blockchain-based decentralized lead-sharing network.
He is additionally the owner of Beitar Jerusalem, one among the top Israel’s soccer clubs, having negotiated its purchase for $7.2 Mln last August, as per the records.
The NIS $17 Mln lawsuit alleges that Hogeg and Stox operator, STX technologies restricted, embezzled millions of USD worth of crypto that had been invested within the company.
The lawsuit also claims that Stox’s white-paper had pledged that if the corporate hit its ICO [initial coin offering] target of raising around $30 Mln in ETH, all the funds would be channelled into developing its product offerings. The anticipation, consistent with the lawsuit, was that the flourishing development of Stox’s prediction market platform would boost the worth of the native STX ‘token‘.
Having raised a sum of around $33 Mln in its Aug. 2017 ICO, the lawsuit alleges that solely $5 Mln of these raised funds were actually used for the development of company’s flagship product. Hu claims that Hogeg re-invested the remaining capital several other ICOs — together with that of major messenger application named ‘Telegram’. The claim additionally states that Hogeg bypassed his commitment to investors by marketing his Stox holdings sooner than promised, supposedly devaluing the tokens’ price.
In line with the report, Hogeg faced a lawsuit earlier in November for the alleged misappropriation of funds in regard to his crypto company named Invest.com — of that Stox is a subsidiary. However, the entrepreneur reportedly denies any allegations in reference to both the filed lawsuits.
As reported earlier, the Stox ICO was promoted by a renowned boxer named ‘Floyd Mayweather Jr., who faces separate charges from the U.S. SEC [Securities and Exchange Commission] for illicit promotional activities around crypto startup Centra Tech’s ICO in 2017. Centra’s founders were afterwards formally indicted by United States prosecutors for fraud.