Israel number one crypto investor is once again being sued for misappropriating funds but this time around it’s by a Chinese investor Zhewen Hu. Per information from Israel local news outlet The Times Israel, Mr. Hogeg is accused of misappropriating crypto investments worth millions of dollars invested in his firm. Included in the lawsuit is the operator of Stox. Among the many investors is Zhewen Hu who injected Ethereum coins worth $3.8 million. From the lawsuit, Zhewen Hu is seeking $4.6 million which equates to NIS 17 million.
According to Mr. Zhewen Hu, the company’s white paper clearly states if the firm holds a successful ICO and achieves its target all the funds raised will be pumped into the development of the platform’s product. And on its material day, Mr. Hogeg and his team were able to raise approximately $30 million in ETH from an ICO held on August 2017. The latter amount of ETH was the target of the firm. According to the lawsuit the management was expected to channel part of the funds to kick start the development of the platform’s prediction market. Development of the prediction market would have boosted the value of the native token significantly. However, only $5 million of the funds raised were channeled to the development of the platform and its product. Moreover according to Hu Mr. Hogeg went against agreement set by selling his stocks leading to the devaluing of the tokens worth. Besides that, he invested part of the funds in other ICOs including that of Telegram a messaging app.
On the other hand, Hogeg woes keep increasing due to the involvement of Floyd Mayweather Jr in promoting Stox ICO. The boxer is facing charges in the US for promoting crypto related businesses illegally. He was charged but agreed to pay fines for his involvement. Apart from facing the charges from Mr. Hu Hogeg was also charged in November 2017 for similar charges of misappropriating funds. In the November case, investors from his other firm Invest.com are the ones who took Hogeg to court. Invest.com is a subsidiary of Stox. In both cases, Hogeg denies any wrongdoing, but it’s up to the courts to decide if he’s guiltily or not. Besides having investments in the crypto sector Hogeg also has investments in the technology sector. He is also the owner of Beitar Jerusalem.