Lawyers representing the founder of Stox (STX), Moshe Hogeg, have claimed that ICO whitepapers are not legally binding. The Israeli businessman is being sued for over $4.6 million.
Hogeg founded the prediction platform Stox (STX) back in 2017, launching a successful ICO that raised over $34 million. Chinese crypto investor Zhewen Hu is attempting to sue for his $3.6 million investment plus interest, after the project did not deliver on its promised returns and it emerged that Hogeg had invested most of the funds that were raised in other businesses.
The Times of Israel reports that Hogeg's lawyers are arguing that any claims made in the whitepaper were of "a descriptive nature only and not binding...A whitepaper does not constitute a prospectus or offering document".
According to Hogeg, the lawsuit is nothing more than "an extortion attempt", and it is harming his public image. As the STOX tokens that Hu purchased are not a security, he was never entitled to any share in the business: "ownership of tokens carries no rights whether express or implied other than a limited potential future right to use or interact with the Stox platform".