businessman using a mobile phone

Sirin Labs founder in hot water over blockchain phones’ unpaid bills

Moshe Hogeg, founder of Sirin Labs, is being sued over alleged unpaid bills for the company’s flagship Finney blockchain phones. The plaintiff, Foxconn International Holding (FIH), said Hogeg and his associates owe the company $6 million.

FIH filed the lawsuit at the Tel Aviv District Court, according to a report by Israeli business newspaper Calcalist. In its lawsuit, it claims that it manufactured 10,000 units of the blockchain-powered Finney smartphones for Sirin Labs, a company Hogeg founded. In the years that followed, FIH has reportedly tried to get its payment from Hogeg.

Sirin Labs first contacted FIH for the production of the phone in 2017. Production of the phone, which was touted as the next big thing in blockchain, began in March 2018. Hogeg was reportedly very involved in the production process, including in the making of design choices for the phone.

Once FIH was done with the production of the smartphone, it sent an invoice amounting to $2.7 million for the parts purchase, development work and production to Sirin Labs. FIH alleged that Sirin also racked up $3.2 million in debt for parts and labor.

In the months that followed, Sirin allegedly made up different excuses for the lack of payment. The Swiss-based company claimed that ‘bureaucrats’ at the bank had refused to authorize the conversion of digital currencies to fiat.

FIH claimed in the lawsuit, “In practice, the respondents evaded paying their debt in every way possible and denied their responsibility towards the company.  It turned out there was no truth to the matter and that the plaintiffs’ bank considered the crypto funds as an asset of unknown origin.”

Despite failure to pay for the first batch of 10,000 smartphones, Sirin requested that FIH make another 10,000 phones for the Indonesian market. It claimed that the money it would make would offset all the debts.

Finney smartphone was announced in November 2018 by Sirin Labs. The firm touted the phone as the first of its kind, claiming it would change how users interact with blockchain technology. However, it didn’t go according to plan for Sirin, with an underwhelming demand for the phone. In the four months that followed the launch, Sirin had to lay off 25% of its staff due to low sales.

Hogeg was also sued in July by a Canadian investor for allegedly conducting a fraudulent initial coin offering (ICO). The investor claimed that Hogeg allegedly raised $34 million selling his “worthless” Stox tokens.

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