A Chinese investor sued Stox.com, the Initial Coin Offering (ICO) backed by Floyd Mayweather. The American boxer has been in trouble with the U.S. Securities and Exchange Commission (SEC) because of this issue and other crypto projects in which he took part.
Not only Stox.com is being sued but also its founder, Moshe Hogeg. They have been accused of misappropriating funds that were raised during the ICO.
Apparently, the investor placed $3.8 million worth of Ethereum (ETH) into the ICO. The decision to invest such a large sum of money into this ICO was based on the white-paper that the company presented to investors and interested users.
In August 2017, the ICO was able to raise $34 million. However, only $5 million was invested into the project. Meanwhile, Hogeg invested the rest of the funds in other Initial Coin Offerings and projects such as the one presented by Telegram called Telegram Open Network.
Hogeg is a cryptocurrency entrepreneur that has already been accused of misappropriating funds in another company in which he works. However, he denies all these charges.
Back in June 2018, he bought land in a suburb of Tel Aviv that was worth $19 million. After it, he invested $7.2 million in the Football Club Beitar Jerusalem. Furthermore, he donated $1.9 million to Tel Aviv University to create an institute for Blockchain Applications.
Mayweather has promoted other ICOs such as Centra Tech that was considered a scam by the SEC. The founders of these projects were also charged with fraud. The SEC has also charged Mayweather because he did not disclose that the endorsements of the ICO were paid by the project. The paid around $600,000 in penalties, disgorgement and interests. He has also been banned and he will not be able to promote securities in the future for three years.