The team of Alex Novak Consulting (led by Managing Partner Alexander Novak and Partner (white collar practice) Gleb Plesovskikh) has been engaged by our client Roman Kaufman(Mikhalev) in connection with the corporate conflict within the HOQU project which occurred following completion of the Initial Coin Offering early this year.
Given high interest from the international blockchain community, we feel the necessity to clarify the situation around the HOQU project and to inform the community about the legal steps, which have been taken on behalf of Roman Kaufman and, later, one of the pre-sale investors.
We trust that bringing clarity and transparency, as well as fostering public discussion, would facilitate developing best practices for the future ICOs and the protection of investors’ rights.
We also trust that the regulators and law enforcement authorities would conduct thorough investigations of the current situation around the HOQU ICO.
Facts and Legal Steps Taken.
A Russian ICO project HOQU successfully raised over than $ 27 mln of investors’ funds earlier this year.
Roman Kaufman, a co-founder of HOQU, was in charge of blockchain expertise and developing international connections. Roman also communicated with several Russian pre-sale investors well known to him who later invested into the project.
After the ICO was completed in February 2018,
Roman Kaufman became increasingly concerned with the project’s status, lack of material developments and financial transparency. Roman began his independent investigation, which led him to finding signs of fraud and misappropriation of the investors’ funds.Roman repeatedly questioned the HOQU project and other co-founders, however, has not received any meaningful responses.
The following developments have then occurred:1. Official requests for information were sent to the HOQU company and the other co-founders, including via notary public. No meaningful clarifications have been received.
2. After Roman started inquiring about the project’s spendings, he began to receive threats from unknown people.
He was threatened by phone and in person that he should stop any inquiries, otherwise “he would regret”. All threats were reported with the local police (the police application was registered in the crime reports registration book on 22 June 2018 under the number 23150).
3. Roman was removed from all public HOQU documents and publications as a “co-founder” after the ICO was completed. Moreover, in the course of attorney investigation, it was discovered that a set of the company registration documents was changed removing Roman (despite the fact that he signed the registration documents as a co-founder in front of a notary public in 2017). These events were also reported to the police (Head Directorate for Economic Security and Fighting Against Corruption of the City of Moscow — the application was registered in the crime reports registration book on 27 August 2018 under the number 20201).
4. One of the early investors filed a claim on 18 September 2018 with the Russian law enforcement authorities on the ground of alleged fraud and embezzlement of funds by the HOQU project and the other HOQU co-founders.
5. Being very concerned with possible violations of the investors’ rights and noting the international scale of the HOQU ICO, Roman Kaufman stands ready to cooperate with all relevant financial and securities regulators involved.
We would also note that, despite several public statements of the other HOQU co-founders with respect to Roman Kaufman, we are not aware of any legal steps substantiating their statements.
To give a complete picture, please also refer to the Medium blog of Roman Kaufman where he sets out his position and describes various facts in connection with the HOQU project.
We will provide further updates in due course.
Aiming to bring greater transparency to the ICO and crypto markets, Alex Novak Consulting stands ready to support any inquiries/ investigations into Russian ICO/ venture projects. We offer full scope legal assessment and business analytics.
Alex Novak Consulting
https://www.alexnovak.ru
