Floyd Mayweather-Backed ICO Responds to Lawsuit: 'Investors Have No Ownership Rights'

Francisco Memoria

Respond to a recently filed lawsuit Moshe Hogeg, an Israeli cryptocurrency entrepreneur, revealed his company has no obligation ot use investor’s funds as claimed in its whitepaper, and that “investors have no ownership rights in the cryptocurrency company they invest in.”

According to the Times of Israel Hogeg, who was recently sued by Chinese investors Zhewen Hu for $4.6 million for misappropriating funds, defended himself noting that his company’s whitepaper and website are of a “descriptive nature only and not binding.”

His lawyers noted that a whitepaper “does not constitute a prospectus or offering document,” separating it from the prospectus’ issued to investors before initial public offerings (ICOs). This would mean whitepapers confer its issuers no legal responsibility.

 

Hogeg’s company, STX Technologies Limited (STX), is a blockchain-based prediction market that was at one point endorsed by boxing legend Floyd Mayweathr, who was later on charged by the US Securities and Exchange Commission (SEC) for not disclosing e ws paid to promote Stox and two other ICOs.

Floyd Mayweather's psot promoting Stox

The Chinese investor filed the lawsuit against Stox as it claimed that if it raised $30 million worth of Ether, it would invest all of the funds to develop its platform to make it successful, and increase the value of their token in secondary markets.

The company’s ICO reportedly raised $34 million back in August of 2017, partly thanks to Mayweather’s promotion. Per the plaintiff, Hogeg only invested $5 million out of the total raised in Stox itself. In addition, he claimed the entrepreneur sold his tokens before the earliest date he said he would do so, which devalued the tokens for investors.

Hogeg: Lawsuit Was An “Extortion Attempt”

In response, Hogeg denied these allegations, noting the employee who claimed only $5 million were invested was mistakes, and that Stox itself is a “thriving website” with a “large number of users.”

According to the Times of Israel, Hogeg claimed the lawsuit was “an extortion attempt,” that’s harming his image. Per his words, investors signed a contract that stipulated Stox tokens’ ownership “carries no rights whether express or implied other than a limited potential future right to use or interact with the Stox platform” when they bought them.

Moreover, he argued STX Technologies Limited is incorporated in Gibraltar, making it the proper venue to file a lawsuit, not Israel. Hogeg himself has notably gone on a multi-million dollar spending spree, according to the news outlet.

Last year, he reportedly spent $19 million buying land in a wealthy suburb in Tel Aviv, and bought Beiter Jerusalem, one of the country’s top soccer teams, for $7.2 million. The Tel Aviv University has also announced it accepted a $1.9 million donations from hm to establish an institute.