On 25 January 2019, The Times of Israel, an English language newspaper, reported that a Chinese investor is reportedly suing Israel-based blockchain predictions market platform Stox (STX) together with its founder, namely Moshe Hogeg, for alleged fraud.

According to the newspaper, an investor named Zhewen Hu filed a lawsuit against the two parties in the Tel Aviv District Court on 24 January 2019, claiming that Hogeg misappropriated crypto worth millions of dollars which were invested in Stox.

Hu allegedly invested Ethereum (ETH) worth $3.8 million in the blockchain firm as he was attracted by the pledge made in Stox’s white paper which stated if the company managed to hit the target of raising $30 million worth of ETH through its initial coin offering (ICO), the total amount raised would be used to develop its platform. The development of the platform, according to the lawsuit, could potentially boost the native STX token value.

However, the lawsuit claimed that only $5 million out of the total $33 million raised through the ICO in August 2017 was channelled to the company for development of Stox’s blockchain prediction market. Hogeg allegedly invested the remaining amount in other businesses and ICOs. Moreover, Hogeg was accused of breaking his promise of holding onto the STX tokens he owned until a stated date, as he had sold his tokens before the date. The move was said to lower the worth of token held by investors.

Back in November 2017, Hogeg was accused in another lawsuit of for a similar case of allegedly misappropriating funds related to his crypto from named Invest.com, which is a subsidiary to Stox. He denied all allegations for both cases.

Moshe Hogeg is a renowned figure in the crypto world, being a co-founder of Sirin Labs, one of the first companies to launch a blockchain smartphone. He is also the chairman of a decentralized lead sharing network called Leadcoin. Additionally, Hogeg negotiated and bought Beitar Jerusalem, one of the top soccer clubs in Israel, for $7.2 million in August 2018.