Israeli Crypto Magnate Faces Allegations Over ICO Fund Embezzlement

By Prashant Jha

Moshe Hogeg, a leading name in the Israeli crypto entrepreneurship scene, has been under fire for allegedly misappropriating finds raised from two ICOs or Initial Coin Offerings. Consequent to his embezzlement, the accusation indicates, both companies that were conducting the ICOs went bankrupt.

Due to the events connected to the alleged embezzlement and company insolvency, 17 petitioners, who are apparently shareholder’s of the company Hogeg is involved with (IDC Investdotcom Holdings or simply invest.com), have submitted a petition for the liquidation of the company itself. The district court of Tel Aviv has appointed a temporary liquidator to handle the proceedings of the liquidation petitioned for.

All these 17 petitioners were also formerly the shareholders of binary options firm AnyOption which has been closed down since the binary options sector was banned by the Israeli government. However, the very overlap between the shareholders of two companies from the crypto and binary options sectors points out how closely the two industries were used to working. Right now, the binary options sector has been forced to withdraw even as the crypto offerings boom in the Israeli fintech scene.

Even though the invest.com was a company initially registered in Cyprus, according to the petitioners, its primary operations were being conducted in Israel. Apparently, while a massive amount (amounting to over ten million dollars) was raised via the ICOs, the shareholders were not allowed to share in the proceeds, as Hogeg took all for himself. The pros and cons of investing in ICOs are many and this scam only serves to highlight the cons part of it.

Hogeg’s recent large spendings have been public knowledge as he shelled out 19 million USD to buy land in Tel Aviv, 7.2 million USD for acquiring the Beitar Jerusalem football team and donated 1.9 million USD to the Tel Aviv University for the founding of a blockchain research department in his name.

Hogeg is known as the owner of venture capital firm Singulariteam, through which he controlled Invest.com and continues to control Sirin Labs, the firm famous for launching blockchain smartphone Finney for just 1000 USD.

While binary options firm AnyOption had been merged with Invest.com, the merger terms had been revised in February 2018 to allow AnyOption shareholders to receive two things:
a) shares of the Stox crypto firm
b) 3.5 million USD from Invest.com
The crypto firm Stox went on to conduct two ICOs, raising a worth of around 34 million USD (which later went up to 60 million due to price hikes in the Ether cryptocurrency) and 33 million USD respectively. According to the 17 petitioners, all this money never made it to the company use of Invest.com but instead went towards augmenting Hogeg’s personal wealth. All allegations and claims of insolvency have been rubbished by Invest.com itself.