Mayweather Endorsed ICO Charged With Fraud
The US Securities Exchange Commission’s new Cyber Unit task force has charged boxing champion Floyd Mayweather endorser, Centra Tech, claiming their ICO offered fraudulent products and had fake biographies.
Centra Charged with Fraud
On Monday, the SEC announced that it charged Centra Tech founders with fraud, based on allegations the company made about their collection of cryptocurrency-related services such as e-wallets, major credit cards that supported prepaid debit cards.
Sohrab Sharma and Robert Farkas have been charged by the agency with fraud for selling “unregistered securities” after they raised $32 million from the ICO of their CTR coin from September 19th to October 5th. According to an official press release made by the SEC’s, both founders have been individually charged and arrested by law enforcing authorities for the same criminality.
The tech company that claimed to be “creating a world connected to cryptocurrency” with their services, has been charged with failing to comply with the anti-fraud and registration requirements of state securities laws.
The charges were brought when the SEC found out that the company had no agreement with either MasterCard or Visa to back up their prepaid cards, and also for making up remarkable biographies and producing false or deceptive marketing materials.
The SEC also alleged that the company paid for celebrity endorsements from DJ Kahleed and boxing legend Floyd Mayweather, who promoted the company on Instagram and Twitter to attract investors for their ICO. Mayweather Tweeted out this message about the launch of the CTR ICO, and on Instagram in September 2017, but since the post has been removed.
Steve Peikin, Co-Director of the SEC’s Division of Enforcement, stated in a press release about the founders of Centra:
“As we allege, the defendants relied heavily on celebrity endorsements and social media to market their scheme. Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors.”