Floyd Mayweather-Backed ICO Responds to Lawsuit: 'Investors Have No Ownership Rights'

  Respond to a recently filed lawsuit Moshe Hogeg,  an Israeli cryptocurrency entrepreneur, revealed his company has no  obligation ot use investor’s funds as claimed in its whitepaper, and  that “investors have no ownership rights in the cryptocurrency company  they invest in.”According to the Times of Israel  Hogeg, who was recently sued by Chinese investors Zhewen Hu for $4.6  million for misappropriating funds, defended himself noting that his  company’s whitepaper and website are of a “descriptive nature only and  not binding.”His lawyers noted that a whitepaper “does not  constitute a prospectus or offering document,” separating it from the  prospectus’ issued to investors before initial public offerings (ICOs).  This would mean whitepapers confer its issuers no legal responsibility. Hogeg’s  company, STX Technologies Limited (STX), is a blockchain-based  prediction market that was at one point endorsed by boxing legend Floyd  Mayweathr, who was later on charged by the US Securities and Exchange  Commission (SEC) for not disclosing e ws paid to promote Stox and two  other ICOs.       

The Chinese investor filed the lawsuit against Stox  as it claimed that if it raised $30 million worth of Ether, it would  invest all of the funds to develop its platform to make it successful,  and increase the value of their token in secondary markets.The  company’s ICO reportedly raised $34 million back in August of 2017,  partly thanks to Mayweather’s promotion. Per the plaintiff, Hogeg only  invested $5 million out of the total raised in Stox itself. In addition,  he claimed the entrepreneur sold his tokens before the earliest date he  said he would do so, which devalued the tokens for investors.

Hogeg: Lawsuit Was An “Extortion Attempt”

In  response, Hogeg denied these allegations, noting the employee who  claimed only $5 million were invested was mistakes, and that Stox itself  is a “thriving website” with a “large number of users.”According  to the Times of Israel, Hogeg claimed the lawsuit was “an extortion  attempt,” that’s harming his image. Per his words, investors signed a  contract that stipulated Stox tokens’ ownership “carries no rights  whether express or implied other than a limited potential future right  to use or interact with the Stox platform” when they bought them.Moreover,  he argued STX Technologies Limited is incorporated in Gibraltar, making  it the proper venue to file a lawsuit, not Israel. Hogeg himself has  notably gone on a multi-million dollar spending spree, according to the  news outlet.Last year, he reportedly spent $19 million buying  land in a wealthy suburb in Tel Aviv, and bought Beiter Jerusalem, one  of the country’s top soccer teams, for $7.2 million. The Tel Aviv  University has also announced it accepted a $1.9 million donations from  hm to establish an institute.