Former employees of the venture fund Singulariteam have filed a suit against ICO startups Sirin Labs, Stx Technologies Limited (Stox) and Leadcoin. All projects belong to the fund’s founder Moshé Hogeg, reports The Times of Israel.
Plaintiffs Roee Brocial [Roee Brocial] and Eran Okashi allege that during ICOICO the projects raised a total of $250 million. However, the companies were not engaged in product development.
According to the complaint, the Israeli entrepreneur allegedly siphoned off the raised funds and used them for personal purposes. For example, he invested more than €17.63 million received from Stox investors into the Telegram Messenger ICO.
“Shortly after the funds were raised, and sometimes during the process, the defendants drained the companies and left them with no meaningful activity, resulting in huge losses for investors,” the document states.
The plaintiffs seek $16.1 million from Hogeg as well as the shareholders and top managers of Singulariteam. They say they believed that Sirin Labs, Stox and Leadcoin complied with the law, and therefore invested their own money in the projects and persuaded family members and friends to invest.
According to the report, Hogeg owns 70% of the venture fund’s shares. Adi Sheleg holds 22.5%, Ido Sadeh 5%, Yaron Shalem 2.5%.
Among the defendants are Leadcoin CEO Samuel Grizim and Singulariteam CEO Avishai Ziv.
Brocial is an employee of Sirin Labs. The suit alleges he effectively acted as Hogeg’s personal assistant. Okashi works as an accountant in the Singulariteam subsidiaries. Both are currently on unpaid leave.
The founder of Singulariteam denies the allegations. In an interview with Walla, he described the lawsuit as “an attempt at extortion.”
Hogeg had previously faced lawsuits from disgruntled investors. In most cases, settlements were reached, and plaintiffs signed non-disclosure agreements.
In January 2019, the entrepreneur was accused of misusing more than $4.6 million raised during the Stox blockchain platform’s ICO.
In April of the same year, Sirin Labs laid off staff. A year earlier, the company abandoned hardware development in favour of software.
In May 2021, in London began an arbitration process for investors’ claims against companies linked to the Telegram Open Network blockchain platform.
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