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Cryptocurrency : Report: Three of Israel’s Most Glorified ICOs Were Fraudulent

Three of Israel’s most famous initial coin offerings (ICOs) in 2017 and 2018 were scams. A report broke this news on May 31, citing a 16.1 million dollar (11.32 million pound) 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, allegedly misleading investors around the world into raising $ 250 million (£ 175.69 million). The plaintiffs claim that the three companies never developed the products they had promised investors. Instead, the plaintiffs believe that the defendants used the money collected for their benefit.

The plaintiffs went on to reveal that Hogeg used the ICO funds on expensive real estate. One of the houses he spent money on was reportedly a luxury apartment in Tel Aviv’s W Tower. This unit reportedly sold for $ 15,000 (£ 10,535.10) per month and was used as a brothel by Singulariteam executives.

The defendants took advantage of the unregulated nature of cryptocurrencies

According to the plaintiffs, who are currently on unpaid leave due to the COVID-19 pandemic, they further revealed that the defendants misled them into believing that 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 damage and psychological trauma.

In the complaint, Okashi and Broncial noted that the defendants opened several blockchain companies with the sole aim of defrauding investors. To show that the defendants were malicious from the start, the plaintiffs pointed out that they would bleed the companies after raising money and sometimes even while raising the funds.

According to the plaintiffs, the defendants took advantage of the fact that the cryptocurrency sector is not regulated to trap unwitting investors. In explaining the number of defendants, the plaintiffs pointed out that there were bogus loan agreements between the three blockchain startups and other companies with which they partnered.

While Hogeg refuted claims of participating in fraudulent ICOs, this isn’t the first time he’s been sued over fraud allegations. His focus in most of these cases has been to settle with the plaintiffs and have them sign confidentiality agreements. The most recent case was when Foxconn International Holding (FIH) sued him for failing to pay factory bills after he hired the company to make Finney blockchain phones.

The post Report: Three of Israel’s Most Glorified ICOs Were Fraudulent appeared first on Invezz.

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