Deceived investors of the Centra project filed a lawsuit against the famous U.S. boxer Floyd Mayweather and DJ Khaled claiming damages, TMZ reports.
According to the portal, deceived users are confident that celebrities knew about the bad faith of the ICO organizers and were even involved in fraudulent actions, and therefore should compensate investors for losses.
Recall that Mayweather and DJ Khaled advertised the project in social media. The boxer recommended purchasing the project’s cryptocurrency, while DJ Khaled said that it is a “game changer.”
“Spending bitcoins, ethereum and other types of cryptocurrency in Beverly Hill,” he wrote and posted a snapshot on which he holds the Centra card.
In his turn, DJ Khaled said that Centra Tech and its products change the rules of the game and also posted the photo where he is captured with the Centra card
But then the project had serious problems. The U.S. SEC decided that the currency issued by the startup was a violation of current legislation. The project has misled investors, and the information published on its website turned out to be a lie.
In the course of the token sale, Centra Tech was able to raise $32 million, not least thanks to the participation of celebrities.
"We allege that the Centra co-founders went to great lengths to create the false impression that they had developed a viable, cutting-edge technology," Robert A. Cohen, Chief of the SEC Enforcement Division's Cyber Unit said in a statement.
In May, the prosecutor's office of the Southern District of New York announced that the jury decided to charge all three creators of the dubious crypto company.
Sharma, Trapani and Farkas have each been charged with securities fraud, wire fraud and two counts of conspiracy, according to an indictment filed with the U.S. District Court in Manhattan.
Centra marketed fake business relationships with major credit card companies including Visa and Mastercard published fictional executive bios and misrepresented the viability of the company's products. Text messages among the defendants revealed their fraudulent intent, according to SEC.
CTR — the coin that Centra Tech created for its ICO — got listed on major cryptocurrency exchanges such as Binance and Cryptopia, its wallet app was approved on the Apple App Store and Google Play Store.
All three project managers tried to escape with $32 million gathered during the ICO, while the price of the token decreased by 98% - from $1 to $0.02 in a month.
Recall that Centra was not the only crypto-related project advertised by the famous boxer. In August 2017, Hubii Network ICO hired Floyd Mayweather through the earlier unknown company “Crypto Media Group” to promote the start of Initial Coin Offering.
“You can call me Floyd Crypto Mayweather from now on… ,” the famous sportsman wrote back then. One month earlier, In July 2017 Mayweather has also promoted the ICO of Stox.com, a blockchain prediction company.
Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.