Moshe Hogeg sued for defrauding investors in cryptocurrency initiative Zodiac

Israeli tech entrepreneur Moshe Hogeg is in legal trouble again after a new lawsuit was filed against him on Thursday to the Tel Aviv District Court, claiming he defrauded investors in a cryptocurrency initiative called Zodiac. The plaintiffs, three Japanese investors, are asking for compensation of more than NIS 27 million (nearly $8 million). Hogeg-owned Singulariteam and his partners in it are also named in the lawsuit.

The subject of the lawsuit is a cryptocurrency project called Zodiac that was meant to serve the retail sector and in which the plaintiffs invested a sum of $8 million. The plaintiffs claim they invested the money based on Hogeg’s announcements that one of the partners in the initiative was a well-known cryptocurrency exchange named Bittrex. They claim, however, that not only was Bittrex never involved in the project, but “despite a purported investment of more than $50 million… the only thing done so far is a lousy and inactive website.”

The lawsuit also mentions Hogeg’s STOX platform that in 2017 raised $33 million, which the plaintiffs alleged were pocketed by its founders: “The defendants saw that stealing troves of investors’ money worked once and decided to launch other similar initiatives.”

The plaintiffs presented the court with news reports that highlighted Bittrex’s role in the venture and noted that its White Paper said that Zodiac was based on Bittrex’s technology and that the exchange’s CEO was a partner in the project.

The tokens, they claim, never ended up being listed on any exchange and are not being traded (Calcalist checked this claim and found no evidence of the tokens on any of the known crypto exchanges).

In April 2018, the plaintiffs added, Hogeg’s company Invest.com, which was meant to be part of the project, completely ceased its operations, and nowadays even its site’s domain is being offered for sale.

“Even the defendants themselves didn’t believe their own claims and knew they were fabricated,” just as they knew that Bittrex was not really a partner in the project, the plaintiffs claimed.

Hogeg responded to the allegations: “We were not presented with the lawsuit and only parts of it were brought to our attention by the media. All of the claims are completely groundless, and we are again witnessing a pattern of behavior in which legal proceedings and media pressure is being employed. Ther are no grounds to the lawsuit, it is nothing more than another baseless proceeding.”

The plaintiffs are being represented by Prof. Avi Weinroth and Adv. Arik Megidish