One of Israel’s leading entrepreneurs in the cryptocurrency field, Moshe Hogeg, is facing accusations of embezzling funds raised from two Initial Coin Offerings consequently rendering the company for which the funds were raised for insolvent.
As a result, 17 individuals who claim to be shareholders of IDC Investdotcom Holdings, the company associated with Hogeg and which is more popularly known as Invest.com, have filed a petition seeking to liquidate the firm. A temporary liquidator has subsequently been appointed by a court in Tel Aviv, according to The Times of Israel.
With the 17 individuals all being ex-shareholders of AnyOption, a binary options firm which is now defunct, the petition has highlighted the close ties that exist between Israel’s thriving cryptocurrency sector and the binary options industry which was recently outlawed in the Middle Eastern country.
Registered in Cyprus, Operates from Israel
Though IDC Investdotcom Holdings is registered in Cyprus, the petitioners have alleged that it was largely run from Israel. After tens of millions of dollars were raised during two successful ICOs, the petitioners allege that Hogeg failed to share the proceeds but instead put the money to his own use.
This year Hogeg has been in the news for various multi-million dollar purchases and donations including a parcel of land he bought in Tel Aviv at US$19 million and the Israeli top soccer club Beitar Jerusalem which he acquired at a price of US$7.2 million. Hogeg also recently donated US$1.9 million to Tel Aviv University to put up a blockchain research facility named in his honor.
The blockchain entrepreneur’s ownership of Invest.com is through his venture capital firm Singulariteam. Other firms in the portfolio of Singulariteam include Sirin Labs which is known for the US$1,000 blockchain smartphone known as ‘Finney’.
Per the petition, AnyOption and Invest.com merged last year in June after it emerged that the former could no longer continue in the binary options business as Israel was planning to ban the sector. Terms of the merger agreement were however changed this year in February with shareholders of AnyOption now entitled to receive US$3.5 million from Invest.com and shares of Stox, a cryptocurrency firm that had been launched.
One of the ICOs which the petitioners claim became the victim of embezzlement was conducted last year in August when Stox held a crowd fundraising event where ETH worth US$34 million was raised though the value later rose to US$60 million. Stox also did another ICO in February this year for a project known as Zodiac where US$33 million was reportedly raised according to the petition.
The petitioners now claim that this amount never benefitted Invest.com but was instead embezzled by Hogeg leading to the current insolvency. Invest.com has, however, denied allegations that it is insolvent.