SEC Fines Celebrities for Advertising ICO
AP Photo/John Locher
Main page Analytics

The U.S. Securities and Exchange Commission (SEC) fined boxer Floyd Mayweather and musician Khaled Mohamed Khaled, better known as DJ Khaled, for promoting ICO Centra.

Mayweather and Khaled did not report on the remuneration, which means the promotion of ICO could look impartial, although in fact it was a paid campaign, as explained in the report of the department. Meanwhile, back in November 2017, the SEC warned that celebrities who receive rewards for advertising ICO and do not disclose the amount of fees, violate the law. At the same time, the regulator warned investors that the intention to invest money should not depend on the opinions of actors, athletes and other stars. SEC recommended that investors verify the independence of sources and distinguish advertising from recommendations.

The financial regulator believes the athlete received $100,000 from the Centra Tech and $200,000 from the Stox and Hubii Network, while the hip-hop artist - $50,000, now they will have to pay fines that far exceed these amounts. Mayweather will have to pay $300,000 of misappropriated funds, $300,000 fine and $14,775 as a percentage for the period before the decision is made. And DJ Khaled - $50,000 illegally appropriated funds, $100,000 fine and a percentage of $2,725.

Celebrities Go Crypto

In addition, in the next few years they are prohibited from promoting any securities, including digital ones. Mayweather won’t be able to advertise such projects in the next three years, DJ Khaled in two. Representatives of the SEC stressed that the boxer will continue to cooperate with the investigation.

Note that in early 2018, SEC and FBI investigated the case of Centra Tech, which attracted $32 million in cryptocurrency, deceived investors. ICO Centra Tech including advertised Mayweather and DJ Khaled.

Organizers of ICO Centra were arrested in April 2018 when they were trying to leave the United States with $32 million owned by investors. The financial regulator accused Sohrab Sharma and Robert Farkas of raising funds by selling unregistered securities and deceiving investors. SEC representatives believe that the company created non-existent executives with serious resumes, using false or misleading materials.

Football Legend Luís Figo Promotes an ICO

Sohrab Sharma and Robert Farkas also informed clients about signing partnership agreements with large companies. The startup promised to submit a debit card in cooperation with Visa and Mastercard, which would allow users to instantly convert digital money into dollars and other currencies, but SEC representatives say that Centra was not connected to these organizations in any way.

The Centra organizers also attracted celebrities for advertising. In October, the affected users filed a lawsuit against Mayweather and DJ Khaled and demanded damages from them, as they were involved in the project by promoting it.

Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.

Please describe the error