Stox Founder Moshe Hogeg Faces $5 Million Lawsuit Following Claims of ICO Being a Ponzi Scheme
Stox is a company that was launched by Moshe Hogeg in 2013 as a subsidiary of Invest.com, another business of Hogeg’s.
Despite already being life, Hogeg chose to wait until last year to officially launch an initial coin offering (ICO), which many people may remember for its promotion by boxer Floyd Mayweather. As a result of the ICO, the company managed to bring in over $30 million in funding.
However, with this substantial funding, many people have been perpetuating a realistic rumor that Stox is simply an exit scam and nothing more. Details of these allegations originally were found within Reddit before it was eventually picked up by major news outlets. Part of the “proof” provided was a list of wallet addresses that showed irregularities in the transactions.
When this rumor first started circulating, Stox had released a statement, saying, “This anonymous source re-published a message that was published and already answered more than a year ago (26.9.2017). This source copied the message and shouted “Exit scam” without having any cause whatsoever… the created tokens were actually tokens purchased by private investors before the public sale. Money taken was converted to Ethereum.
This was purchased by Hogeg. Hogeg used this money to purchase additional STX following the company’s public sale.
A second rumor sprung up as well, saying that the company had let go of the staff at the platform and that their office had been closed as well. Stox responded again, crediting the loss of staff was due to a falling out with a partnership deal that involved themselves and Chromologic. Then, they were gone, off on their way to “operation in Europe.”
At this point, there is no evidence to say if the project is actually an exit scam, but it was originally meant as a platform that predicts the outcome of the market to help users earn more money. The website itself offers the prediction of Bitcoin prices as an example, which does not exactly sound like binary options. Perhaps that is the reason that a Chinese investor is suing him.
Zhewen Hu, the investor, has accused Hogeg of running a Ponzi scheme, which he chose to invest in before this information became known. In an Israeli court, Hu is demanding NIS 17 million ($4.63 million) in compensation, but Hogeg responded to the lawsuit by saying that he will “not give in to despicable extortion attempts.” He stood his ground, adding,
“I am the force behind the company and will have the final say.”
In the lawsuit, Hu also accuses of Hogeg and other players in the Stox platform of keeping the money and departing from their work on the brand. Even with a whitepaper and business plan in place, Hu defends his own stance, saying that those things were just efforts to convince consumers to invest.
Even though there is no evidence yet of an exit scam, there’s some merit to the claims that Hu stated. A local outlet revealed that the company was planned to be launched in conjunction with Invest.com, according to the initial whitepaper. At the time, Hogeg said that the website was home to three million users, exceeding $50 million in revenue in 2016, all of which would be issued a crypto wallet to use with Stox.
None of these plans ever came to fruition. In fact, right now, Invest.com is just a landing page, and the Android Google Play store shows less than 1,000 downloads. Right now, there are advertisements for sports betting, but there is no certainty of if this function is even active.