Moshe Hogeg, the 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 that Sirin Lab founder and his associates owe the company $6 million. According to a report by Israeli business newspaper Calcalist, the company claimed in its lawsuit 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 founder was involved in the process of production.
According to the report, Sirin Labs first contacted FIH for the production of the phone back in 2017. Production of the blockchain 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 making design choices for the phone. Once FIH was done with the smartphone production, it sent an invoice amounting to $2.7 million for the parts purchase, development work, and production to Sirin Labs. The lawsuit also claimed that Sirin also racked up $3.2 million in debt for parts and labor.
Blockchain phones did not sell as the company expected.
According to the lawsuit, Sirin Labs 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. The lawsuit stated, “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.”
Sirin Labs had claimed that these phones would change how users interact with blockchain technology. However, it didn’t go according to the company’s plan, 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.