Blockchain Prediction markets platform Stox is being sued by a Chinese investor over alleged fraud. According to a report by an Isreali newspaper, the investor known as Zhewen Hu is suing the startup for approximately $4.6 million.
Zhewen Hu allegedly invested around $3.8 million worth of Ethereum (ETH) in the Israeli based startup Stox.
Founded by Moshe Hogeg, Stox is an Ethereum based prediction platform. Moshe Hogeg is well known in the blockchain community for his various cryptocurrency-related projects. Projects such as blockchain smartphone developer Srin Labs. Moshe Hogeg also serves as chairman of the decentralized sharing network LeadCoin. Additionally, Hogeg is the owner of Beitar Jerusalem, an Isreali football club.
The lawsuit accuses Hogeg and Stox of misappropriating millions of dollars of Crypto funds that had been poured into the Startup. Furthermore, The plaintiff claims that Stox’s white paper had promised if the firm attained its ICO or coin offering goal of $30 million in ETH, all the funds would be put into developing its product.
According to the lawsuit, the vision was the successful development of Stox’s platform would boost the worth of its token(STX). The company raised around $33 million in its August 2017 ICO and the lawsuit claims that only $5 million was actually used in the company and its product. Furthermore, the plaintiff, Mr. Hu has stated that Hogeg used the rest of the funds in other ICOs and projects.
The lawsuit has also explained that Mr. Hogeg sold his Stox(STX) token earlier than he pledged, thus causing damage to the value of the Token still being held by investors. The Isreali entrepreneur has reportedly denied any wrongdoings and accusations.