Japanese investors sue over Zodiac crypto exchange

A NIS 27.6 million lawsuit was filed in the Tel Aviv District Court last Thursday against Moshe Hogeg, owner of Beitar Jerusalem Football Club, against the Singulariteam venture capital fund which he heads, and against several former partners in the fund: Adi Sheleg, who was a state’s witness in the criminal proceedings against Nochi Dankner in the IDB share pegging affair; Yaron Shalem, who was a vice president at Singulariteam and is now a senior manager at blockchain company Saga; and Ido Sadeh Man, founder and chairman of Saga.

The suit was filed by several Japanese investors who claim that they fell victim to a sting operation by Hogeg and his partners. The claimants, Sasaki Tetsuya, Hattori Satoshi, and Beta Co. Ltd. of Japan, who are represented by Adv. Avi Weinroth and Adv. Arik Megidish of Prof. Avi Weinroth & Co., claim that Hogeg and his partners raised millions of dollars in early 2018 for investment in a venture for setting up a cryptocurrency exchange called Zodiac together with Bittrex, a company that at the time held one of the largest cryptocurrency exchanges in the world. In fact, the claimants say, this presentation was false.

According to the statement of claim, about two years after the claimants invested $8.2 million in cryptocurrency in Zodiac, and the venture did not succeed, as they claim, they found out that Bittrex was never a partner in setting up the venture. They also claim that whereas Hogeg and his partners made out to the investors that their money would be used to develop the venture, in fact they took it for themselves, and as far as the venture was concerned, all that was done was to set up an Internet site with no activity.

The claimants state that many more investors invested amounts totaling tens of millions of dollars with Hogeg and his partners in the Zodiac venture, money that they claim found its way into the pockets of Hogeg and his partners in a sophisticated “sting” operation.

In response to the lawsuit, Singulariteam stated to “Globes”: “The claim has not reached us; parts of it have reached us through the press and media. All the claims are baseless. We are again witnessing a mode of action and a regular pattern of exploiting legal proceedings and exerting pressure through the media. There is no cause or justification for filing a claim. This is another baseless and empty proceeding.”

The Zodiac venture, which was set up in 2017, raised tens of millions of dollars in early 2018 for the purposes of setting up a cryptocurrency exchange and developing a digital coin, ZDC. According to media reports at the time, Zodiac raised a total of $33 million, but according the current lawsuit the amount was over $50 million.

On behalf of Ido Sade and Yaron Shalem, Adv. Meirav Bar-Zik and Tal Shapira said, “Our clients firmly reject the attempt to slander their names by associating them with this lawsuit, which they have nothing to do with. At the said period, our clients held no active role in the Singulariteam fund, from which they departed completely almost two years ago. Our clients have no ties to the project described in this lawsuit, either directly or indirectly, and their response shall be given in court, should it be required.”

Moshe Hogeg, Adi Sheleg, Yaron Shalem, Ido Sadeh Man, and Singulariteam, the defendants in this case, have not yet filed statements of defense, and they are presumed innocent until convicted in a court of law.

Published by Globes, Israel business news – en.globes.co.il – on September 21, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020