DJ Khaled
- Uncategorised

DJ Khaled, Floyd Mayweather charged for illegally promoting fraudulent ICOs


DJ Khaled

The SEC said music producer DJ Khaled and boxer Floyd Mayweather were charged for illegally promoting ICOs.


Jason Koerner/Getty Images

Music producer DJ Khaled and professional boxer Floyd Mayweather promoted investments in Initial Coin Offerings without disclosing the payments they received in return, the US Securities and Exchange Commission said Thursday. The charges against the two men have been settled.

The SEC said these were the first cases to charge touting violations with ICOs.

Khaled talked up Centra Tech on his social media accounts as a “Game changer,” but didn’t disclose a $50,000 payment from the company, the SEC said. Mayweather also didn’t disclose promotional payments from three ICO issuers, including Centra Tech, which gave him $100,000, the Commission added. He once tweeted that Centra’s ICO “starts in a few hours. Get yours before they sell out, I got mine….”

In 2017, the SEC issued its DAO Report, which said coins sold in ICOs could be securities, and anyone who offers and sells securities in the US has to comply with federal securities laws. In April, the SEC filed a civil action against Centra’s founders, claiming the ICO was fraudulent.

Khaled and Mayweather didn’t admit to or deny the SEC’s findings, but agreed to pay disgorgement, penalties and interest. 

Khaled will pay $50,000 in disgorgement, a $100,000 penalty and $2,725 in prejudgment interest. Mayweather will pay $300,000 in disgorgement, a $300,000 penalty and $14,775 in prejudgment interest. Mayweather and Khaled agreed not to promote any securities for three and two years, respectively. 

“Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements,” said Steven Peikin, co-director of the SEC’s Enforcement Division, in a statement. “Social media influencers are often paid promoters, not investment professionals, and the securities they’re touting, regardless of whether they are issued using traditional certificates or on the blockchain, could be frauds.”

Representatives for Khaled and Mayweather didn’t immediately respond to requests for comment.



Source link

About techtoday

Read All Posts By techtoday

Leave a Reply

Your email address will not be published. Required fields are marked *