Celsius Network and "That Hogeg Guy"
Celsius Network and "That Hogeg Guy"
Moshe Hogeg and Alex Mashinsky: Working together since (at least) 2018
On November 18th, 2021, a group of eight people were arrested in Israel on suspicion of committing fraud in multiple crypto-related schemes. The purported ringleader of these schemes is Moshe Hogeg, a well-known entrepreneur and venture capitalist with a multitude of projects under his belt. (https://www.timesofisrael.com/alleged-dirty-dealings-and-sex-offenses-moshe-hogegs-long-history-of-deceit/)
Also arrested was a man named Yaron Shalem, the former CFO of several Hogeg companies who was most recently employed as CFO of Celsius Network. This close relationship between Celsius and “systematic and sophisticated” fraud schemes prompted many to ask why Celsius hired Mr. Shalem, and if there were more involvement between the company and the various scams Mr. Hogeg was accused of running.
In response, Celsius issued a statement that:
And, in an AMA, when I asked Mr. Mashinsky about the relationship between Shalem, Hogeg, and Celsius, he responded:
DBM: Ok, so you're denying any knowledge or anything about this case, or where your CFO is right now?
Mashinsky: I, I… the guy you're talking about, there's nothing to do with Celsius, ok, so...
DBM: Yaron Shalem has nothing to with Celsius Network?
Mashinsky: The guy you talked about, this Hogeg guy, has nothing to do with Celsius.
And that, unfortunately, is a lie… because Moshe Hogeg and Alex Mashinsky have been working together since at least January of 2018!
1. Hogeg was an early advisor to Celsius Network
Yep!
The below image is a screenshot from an archived version of Celsius Network’s website in January, 2018. It shows their collection of “the best advisors to work with us:”
https://web.archive.org/web/20180110062410/https://celsius.network/
This makes Hogeg one of the earliest people involved in the company, as Celsius started operations in late 2017.
Typically, advisory positions like this are linked to an equity stake. Did Hogeg, or his VC firm Singularteam, own part of Celsius Network? Does he still? Did Hogeg participate in the Celsius ICO?
We don’t know.
We DO know he still had a very positive opinion of Celsius as late as September of 2021…
2. Alex Mashinsky was an advisor to, and invested in, Hogeg’s Sirin Labs ICO:
One of the Hogeg firms accused of fraud is Sirin Labs, a “blockchain phone” company that completed a $132 million ICO in 2018. The company collapsed when Hogeg was unable to deliver on his promises.
Alex Mashinsky served as an advisor to the company, according to archived versions of Sirin Labs’ website and other sources:
Mr. Mashinsky’s venture capital firm, Governing Dynamics, continues to proudly display their involvement in the Sirin Labs ICO on their website.
And despite that big $132 million “success,” the value of Sirin Labs token crashed shortly thereafter, and is now basically worthless:
If Mashinsky/Governing Dynamics were hurt by this failed business, why do they continue to advertise it as a success?
3. Celsius Network supported and invested in Sögur
Sögur (initially called Saga) was developed as an algorithmic stablecoin and advertised as “the true evolution of money:”
It was founded by Ido Sadeh Man, the co-founder of Moshe Hogeg’s Singularteam venture capital firm in March 2018. Mr. Man’s prior experience included a stint as COO of Mobli, another Hogeg scam firm that also employed Mr. Shalem.
In April 2020, early in the development of Sögur, an article appeared in The Block containing an interview with Mr. Sadeh Man, advertising a new relationship between Sögur and Celsius Network, where Celsius would offer 9.9% returns on Sögur deposits:
Why did Sögur pick Celsius Network? Well, because they had invested in it!
(Take a sec to consider the conflict of interest here!)
https://www.theblockcrypto.com/post/61014/libra-competitor-saga-token-holders-can-now-earn-up-to-9-9-annual-interest
Sögur has since shut down. It is unclear if they ever issued any tokens, and the extent of the financial damage to its investors remains unknown.
4. Yaron Shalem was hired as CFO of Celsius Network
One would expect that the “Chief Financial Officer” is a critical role at a lending company. In early 2021, Celsius Network hired Yaron Shalem to take the job:
Mr. Shalem brought years of experience as CFO to Celsius. Coincidentally, he had been employed at three different Hogeg-owned firms prior to coming to Celsius:
It is reasonable to assume that Mr. Mashinsky knew Mr. Shalem due to his relationship with Mr. Hogeg’s firms and came with Mr. Hogeg’s recommendation. And given Mr. Mashinsky’s very active role in running Celsius, it is reasonable to assume that he was personally involved in selecting Mr. Shalem for the CFO position.
Only ten months later, Mr. Shalem was sitting in an Israeli prison with his former boss and colleagues.
Conclusion: Just another guy?
Even from the limited amount of public information we have, it is clear that Mr. Mashinsky had worked with and known Mr. Hogeg for years. Hogeg was an advisor at Celsius prior to their ICO, and both Celsius and Mr. Mashinsky invested in and supported Mr. Hogeg’s projects. And Mr. Mashinsky chose to hire a CFO whose major relevant experience was working for Hogeg companies. All we know, for now, is the information that is publicly available…
It is interesting to note the similarities between the career of Moshe Hogeg and Alex Mashinsky: Both made their names at an early age with a failed startup (Mobli for Hogeg, Arbinet for Mashinsky). Both went on to found venture capital firms that participated in a string of failed companies. And, both got involved in the ICO/crypto business around the same time. The major difference is that Mr. Hogeg was arrested for fraud, while I have not found evidence that Mr. Mashinsky has ever been arrested or charged with any crime.