Zhewen Hu, a Chinese cryptocurrency investor, has recently filed a $4.6 million lawsuit in the Tel Aviv District Court against STX Technologies Limited – also known as Stox – and against its founder Moshe Hogeg, alleging he misappropriated millions worth of crypto.
According to the lawsuit, Hogeg has reportedly used funds that were set to be invested in the company to invest in other initial coin offerings (ICOs), such as that of Telegram. Hu is said to have invested a total of $3.8 million in Stox, an Ethereum-based prediction market platform.
Hu’s investment came as the company’s whitepaper claimed it would invest all of the money it raised to develop its platform and make it successful if it managed to raise over $30 million. This would, in turn, increase the value of Stox’s tokens in secondary markets, rewarding investors.
— STOX (@stx_coin) November 8, 2018
Per the Times of Israel, the company’s ICO raised $34 million, and Hogeg only invested $5 million into the company. Moreover, he reportedly sold his own tokens before the date he was supposedly allowed to, which helped devalue Stox’s tokens.
In another lawsuit, in November 2018, Hogeg was reportedly also accused of misappropriating company funds, from another cryptocurrency venture he controls, invest.com. The news outlet reports Hogeg denied these allegations in both cases.
Multi-Million Dollar Spending Spree
The Times of Israel adds that Hogeg is one of the country’s highest-profile cryptocurrency entrepreneur, and has in the last few months been spending millions of dollars in various investments. These included a $19 million land purchase in a wealthy Tel Aviv suburb from a businessman, paid partly in bitcoin.
In August of last year, the entrepreneur is said to have forked over $7.2 million for Beitar Jerusalem, one of the country’s top soccer teams, and later on in October supposedly donated $1.9 million to the Tel Aviv University to establish an institute for blockchain applications.