Just to make it clear DJ Khaled nor Floyd Mayweather have been charged with any crimes or violations by the US Securities and Exchange Commission (SEC), a body that governs the stock and financial markets. Mayweather and Khaled merely participated as celebrity endorsers in the Cryptocurrency’s fundraiser by promoting it on social media which the SEC says was instrumental in raising $32 million for Centra Tech. Inc.
Centra Tech. Inc., is owned Sohrab “Sam” Sharma and Robert Farkas, who the SEC did charged with violating the anti-fraud and registration provisions of US securities laws. The company is accused of using an Initial Coin Offerings to raise funds online, and offering a self-created digital “tokens” or coins to buyer. According to reports, Sharma and Farkas masterminded a fraudulent Initial Coin Offering, to take advantage of the Bitcoin and Cryptocurrency craze, in which their company Centra offered and sold unregistered investments through a “CTR Token.”
The charges, filed in New York, also say they “claimed that funds raised in the ICO would help build a suite of financial products,” such as debit cards that would allow users to instantly convert hard-to-spend Cryptocurrencies into legal tender. But, there was no relationship with legitimately-backed debit cards. “The defendants relied heavily on celebrity endorsements and social media to market their scheme,” Steve Peikin, co-director of the SEC’s Division of Enforcement, said in a statement.