2021-6-2 20:10 |
Three of Israel’s most famous initial coin offerings (ICOs) in 2017 and 2018 were scams. A report unveiled this news on May 31, citing a $16.1 million (£11.32 million) lawsuit filed on May 25 by Roee Broncial and Eran Okashi, who are employees of the Singulariteam venture capital fund. The defendants in the case are Moshe Hogeg, Adi Sheleg, Ido Sadeh Man, Yaron Shalem, Shmuel Asher Grizim, Avishai Ziv, Singulariteam Holding II, and Singulariteam Ltd.
According to the report, the three ICOs were launched by Sirin Labs, Stx Technologies Limited (Stox), and Leadcoin, and they allegedly duped investors across the globe into raising $250 million (£175.69 million). The plaintiffs purport that the three companies never developed the products they had promised the investors. Instead, the plaintiffs believe that the defendants used the raised money for their gain.
The plaintiffs went on to disclose that Hogeg used the ICO funds on expensive real estate. Reportedly, one of the houses on which, he spent money was a luxury apartment in Tel Aviv’s W Tower. Allegedly, this unit went for $15,000.00 (£10,535.10) per month and Singulariteam executives used it as a brothel.
Defendants took advantage of the unregulated nature of cryptoPer the plaintiffs, who are currently on unpaid leave due to the COVID-19 pandemic further disclosed that the defendants deceived them into believing the ICOs were legitimate. As a result, they invested their money and also encouraged family and friends to invest in the companies. After the companies failed to deliver on their promises, Broncial and Okashi claim to have suffered financial damages and psychological trauma.
In the complaint, Okashi and Broncial noted that the defendants opened multiple blockchain companies with the sole aim of scamming investors. To show that the defendants were malicious from the start, the plaintiffs noted that they would bleed the companies dry after raising money and sometimes even while raising the funds.
According to the plaintiffs, the defendants took advantage of the fact that the crypto sector is unregulated to ensnare unwitting investors. Explaining the number of defendants, the plaintiffs noted that there were false loan agreements between the three blockchain startups and other companies they associated with.
While Hogeg refuted the claims of engaging in fraudulent ICOs, this is not his first time to get sued over fraud allegations. His approach in most of these cases has been settling with the plaintiffs and having them sign non-disclosure agreements. The most recent case was when Foxconn International Holding (FIH) sued him for not paying factory bills after he contracted the firm to manufacture Finney blockchain phones.
The post Report: Three of the most glorified ICOs in Israel were fraudulent appeared first on Invezz.
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