Sirin Labs lays off 25% of workforce

Moshe Hogeg and Lionel Messi Photo: PR

The company said sales of its smartphone were less than expected.

Sirin Labs, controlled by Moshe Hogeg, chairperson of the Singulariteam fund and owner of the Beitar Jerusalem soccer team, today responded to media reports of a wave of layoffs at the company. Sirin Labs told "Globes" that it had recently laid off 15 of its 60 employees, slightly fewer than reported.

"The global market is not in the best state," Sirin Labs said, adding that the company had completed development of its product, the Finney blockchain smartphone, equipped with a digital wallet and other apps designed for use with digital currencies. Sirin Labs launched the device in November 2018 at a $999 price. The company recruited Argentinian soccer star Lionel Messi as an ambassador for its brand.

Sirin Labs denied the media report that it had failed to pay wages to its employees, saying that the employees had been paid today for March and would be paid tomorrow for April, ahead of the Passover holiday. "The company gives some of its work to outsourcing, and plans to focus on development and distribution of the software," Concerning sales of its smartphone, Sirin Labs said, "Sales are not what we expected."

Sirin Labs, managed by Moshe Hogeg, is the flagship startup of Hogeg and the Singulariteam investment fund he founded together with Kenges Rakishev, his billionaire Kazakh partner. Sirin Labs raised $158 million in December 2017 in an ICO. The company earlier raised $97 million, making a total of $255 million since it was founded. The value of SRN, the digital currency issued by the company, has plummeted 99% since its peak in January 2018.

Sirin Labs is not Hogeg's first startup to lay off employees or close down its activity. In late 2018, STX, which operated the Stox blockchain platform, closed down its activity in Israel and laid off all of its employees. In 2017, Mobli, which Hogeg founded in 2010, closed down, after having reported raising $86 million to develop a picture sharing app.

Huge lawsuits in Tel Aviv and Los Angeles

"Globes" reported last Thursday that a lawsuit of at least $50 million had been filed in California against Hogeg, Rakishev, and Chinese-American Singulariteam managerJoseph Chen. The complainant in California is Canadian Internet entrepreneur Adam Perzow, who sold the invest.com domain to Hogeg and Rakishev's company in late 2014 for over $5 million. The statement of claim also accuses Hogeg and his partners of defrauding many investors around the world of hundreds of millions of dollars.

"Globes" recently published reports about two other lawsuits filed against Hogeg at the Tel Aviv District Court by investors in the enterprises he managed. In the more recent of the two, negotiations are taking place towards a possible settlement in which Hogeg and STX will pay $2 million (over NIS 7 million) to Chinese complainant Zhewen Hu, who sued Hoged and the company, alleging "a well-planned sting" in STX's ICO of the stox.com venture.

Last December, as first reported in "Globes," a legal dispute was revealed between Hogeg and Singulariteam, which he heads, and 17 shareholders in the AOH binary options company, known under the AnyOption name. The group of investors initially alleged that Hogeg had smuggled assets from IDC Holdings, operating through the invest.com website. Eventually, following a mediation procedure, the dispute ended in a settlement, details of which were left undisclosed.

An earlier lawsuit against Hogeg filed in a US court by haredi (Jewish ultra-Orthodox) billionaire Shlomo Rechnitz in March 2018 is still pending. Rechnitz alleges that he bought shares in Mobli for $5 million following a fraudulent presentation to him by Jason Lyons, who served as an intermediary in the deal. Rechnitz is suing Lyons and Hogeg for violations of securities laws and unjust enrichment, and is also suing Lyons for fraud, false and negligent presentation, and violating the brokers registration law in California. The next hearing in the lawsuit against Hogeg, Lyons, and Mobli is scheduled for May 21 in a Los Angeles court.

Published by Globes, Israel business news - en.globes.co.il - on April 15, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Moshe Hogeg and Lionel Messi Photo: PR
Moshe Hogeg and Lionel Messi Photo: PR
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