A third founder of Centra, a cryptocurrency firm that was endorsed by champion boxer Floyd Mayweather, has been charged with fraud by the US Securities and Exchange Commission (SEC).
Raymond Trapani's co-founders at Centra, Sam Sharma and Robert Farkas, were charged and arrested earlier this month over allegations of fraud related to the startup's initial coin offering.
"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.
"Investors should exercise caution about investments in digital assets, especially when they are marketed with claims that seem too good to be true," he added.
The SEC’s amended complaint alleges that Trapani was a mastermind of Centra’s fraudulent ICO, which raised $32 million.
Centra allegedly marketed fake business relationships with major credit card companies including Visa (TIKER: V.NYSE) and Mastercard (TIKER: MA.NYSE) 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.
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Trapani.
By Siranush Ghazanchyan