A Chinese cryptocurrency investor has reportedly filed a lawsuit against Moshe Hogeg, the founder of blockchain smartphone developer Sirin Labs and FinTech firm Invest.com, for allegedly misusing funds raised in an initial coin offering (ICO) for a prediction market platform.
According to the lawsuit filed on January 24 in Tel Aviv District Court, the Chinese investor, Zhewen Hu, invested approximately $3.8 million of ethereum in Stox’s ICO in August 2017. According to its whitepaper, the Stox prediction market, which is a spin-off of Invest.com, claimed that if the platform were able to raise $30 million, it would invest all of the money to develop its prediction market platform, and the successful development of the platform would boost the value of the native STX token.
After raising $34 million in its ICO, the investor alleges that Hogeg only invested $5 million of this total in the company and used the rest to invest in other ICOs, including that of messenger app Telegram. The lawsuit also claims that Hogeg sold his own Stox tokens early and thereby diluted the value of other investors’ tokens in secondary markets. The investor is seeking $4.6 million in compensation from Hogeg and his firm.
In November 2018, Hogeg was accused in a lawsuit of misappropriating funds in Invest.com. 17 investors reportedly petitioned the courts in Tel Aviv to dissolve the company, claiming that Hogeg has been freely spending the $67 million dollars raised by Invest.com in two ICOs. Hogeg reportedly denies any wrongdoing in connection with both cases.