Several former employees of venture capital fund Singulariteam have filed a lawsuit against the ICOs of startups Sirin Labs, Stx Technologies Limited (Stox) and Leadcoin, Times of Israel has reported.
The plaintiffs, Roee Brocial and Eran Okashi, claim that even though the projects raised a total of $250 million during their ICOs, they did not develop any products.
According to the lawsuit, Israeli entrepreneur Moshe Hogeg, owner of the 3 companies, allegedly misappropriated the funds raised and used them for personal purposes, for instance, investing more than €17.63 million in Telegram's ICO.
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The plaintiffs want to recover $16.1 million.
However, Hogeg has denied the allegations and said the lawsuit is an extortion attempt by disgruntled employees.
It should be noted Hogeg has received lawsuits from disgruntled investors in the past. However, all of them have ended in settlements between the parties.