DJ Khaled
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DJ Khaled, Floyd Mayweather settle with SEC over cryptocurrency charges


DJ Khaled

DJ Khaled


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Music producer DJ Khaled and boxer Floyd Mayweather have settled with the US Securities and Exchange Commission over charges that they promoted investments in initial coin offerings without disclosing the payments they received in return, the SEC said Thursday.

The commission said this was the first time it had brought such charges involving the touting of cryptocurrency offerings.

Khaled talked up Centra Tech and its Centra cryptocurrency tokens on his social media accounts 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. Mayweather once tweeted that Centra’s ICO “starts in a few hours. Get yours before they sell out, I got mine…” the SEC said. He received $200,000 to promote the other two ICOs, according to the agency.

In 2017, the SEC issued its DAO Report, which said coins sold in ICOs could be securities and that 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 Tech’s founders, claiming the ICO was fraudulent.

Khaled and Mayweather didn’t admit to or deny the SEC’s findings but agreed to pay the amount they made from the cryptocurrency companies, along with penalties and interest. 

Khaled will pay $50,000 along with a $100,000 penalty and $2,725 in prejudgment interest. Mayweather will pay $300,000 along with 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,” the co-director of the SEC’s Enforcement Division, Steven Peikin, said 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 respond to requests for comment.

Blockchain Decoded: CNET looks at the tech powering bitcoin — and soon, too, a myriad of services that will change your life.

Follow the Money: This is how digital cash is changing the way we save, shop and work.



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