Floyd Mayweather Jr. and music producer DJ Khaled settled charges with the Securities and Exchange Commission Friday for failing to disclose payments they received for ICOs they promoted, with the fraudulent Centra ICO being the primary target. These settlements represent the first such cases for the SEC, who have been tightening their grip over all things crypto for some time, and are likely to be first of many such rulings.
Fraudulent Promotion
The SEC found that Mayweather, who advised his Twitter followers to buy Centra tokens at the ICO stage “before they all sell out”, failed to disclose payments from three ICO issuers in total, including $100,000 from Centra Tech. The man who invited his followers to “call me Floyd Crypto Mayweather from now on” received payments totaling $200,000 to promote the other two ICOs. Khaled, who called Centra a “game changer” on his social media accounts, neglected to disclose a $50,000 payment for the promotion of the ICO.
Centra’s Rise and Fall
Centra’s short life was a troubled one. Launched in 2017 with the intention of “connecting the bridge between commerce and cryptocurrency”, Centra raised $32 million during its ICO, with the help of Mayweather and Khaled, and proceeded to get listed on exchanges such as Binance. Suspicions were soon raised about its authenticity however, and after months of the co-founders rushing around to cover their tracks, they were arrested in April on counts of fraud.
The coin was swiftly de-listed from Binance before being declared a security in June, by which time the connection to Mayweather and Khaled had become clear, with charges brought in October. The case against the Centra co-founders is ongoing.
And the Bill Comes to…
Mayweather and Khaled agreed to pay disgorgement, penalties, and interest without admitting or denying the charges. Mayweather’s bill comes to just short of $615,000 while Khaled will pay almost $153,000. Both have had bans imposed upon them preventing them for promoting securities for three and two years respectively, although the odds of them rushing back to promote another ICO any time soon were probably slim anyway.
Mayweather’s net worth is thought to be around $1 billion with DJ Khaled’s thought to be about $20 million, so presumably the fines won’t ruin their Christmas shopping plans. The SEC did not state whether the fine had to be paid in cash or if Centra tokens would be accepted.
