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Israeli crypto entrepreneur Moshe Hogeg again confronted with fraud allegations

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Greed

In November 2019, FinTelegram exposed the network of companies around the Israeli crypto entrepreneur Moshe Hogeg and provided some background intel. FinTelegram disclosed that Hogeg evolved his group of companies out of the deeply suspicious Israeli binary options industry.

Almost exactly one year later, CTech reported, that the new lawsuit alleges Hogeg and his partners were “motivated by greed and a total disregard for anyone but themselves,” and issued a larger amount of Stox tokens than originally announced, which eventually caused significant depreciation in the value for the digital currency. Founded in 2013 as a subsidiary of Invest.com, Stox raised $34 million in an ICO of its namesake digital coin in August 2017.

The 8 counts federal court lawsuit in Seattle names Stox Technologies and Moshe Hogeg as defendants, The Block reports. The plaintiff claims that he purchased Stox tokens relying on the statements ICO whitepaper. Unfortunately, he was damaged to the tune of $435,000 when the defendants unexpectedly started to sell Stox tokens. This was “causing a drastic and unpredictable loss in value of the currency.” 

Greed is certainly reprehensible but the legal question is whether Hogeg has lied to investors or betrayed them. This is what this new lawsuit claims.

Misappropriation of funds

Moreover, Hogeg used investor money to fund his $7 million acquisition of Beitar Jerusalem Football Club, a $19 million real estate deal in Kfar Shmaryahu, an affluent Tel Aviv suburb, and a $1.9 million donation to TAU, which named a research institute after Hogeg. The Plaintiff further argues that the losses weren’t just to him, but that investors in the U.S. and all over the world were defrauded out of hundreds of millions of dollars.

The Chinese Stox token lawsuit

Earlier this year, Chinese citizen Zhewen Hu filed a NIS 17 million (approximately $4.6 million at the time) lawsuit in Tel Aviv, accusing Moshe Hogeg of fraud. The lawsuit alleged that Hogeg used money received from the buyers of Stox crypto coin for personal gain and other companies he was involved with. The lawsuit was settled in May 2019 following a mediation process. In July, another lawsuit filed in Tel Aviv accused Hogeg of misleading investors concerning the prospects of Mobli Technologies, which went bankrupt in 2016.  

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