The US Securities and Exchange Commission (SEC) imposed fines on boxer Floyd Mayweather Jr. and music producer Khaled Khaled on Thursday for not revealing that they received payments to promote ICO Centra Tech. made in September 2017.
According to the SEC, published on Thursday, the famous boxer received 100 thousand dollars from the leaders of Centra Tech to promote the Initial Currency Offer (ICO) of the company. In addition, Stox and Hubii Network deposited a total of $ 200,000 in Mayweather’s account for the same purpose.
In another opinion of the regulator, it was noted that DJ Khaled received a payment of 50 thousand dollars from Centra Tech to promote this brand in their social networks.
In both reports, the SEC notes that the celebrities' promotional activities of Centra Tech seemed “impartial”, but it turned out that it had been given approvals to distribute misleading information.
Centra Tech was considered one of the most popular initial currency offers of crypto-advertising, allowing capitalization of a total of $ 32 million in a round of financing. However, it soon became clear that the cryptocurrency project offering a credit card for crypto-advertising was in fact a financial fraud.
At present, the founders of Centra Tech are facing a 65-year-old imprisonment accused of conspiracy and financial fraud. Project managers are being prosecuted for violating the law when selling a token in the United States without permission from the SEC, as well as preventing information about the company and giving false information about alleged membership of Visa, Mastercard and Bancord to distribute fake credit cards. for crypto conversions.
Among the accusations that were made in the case of Centra Tech, misleading advertising was shown, which was broadcast by Mayweather and DJ Khaled on social networks. Celebrities used their Instragram and Twitter accounts to distribute photos and commentary advertising investments in Centra Tech's Initial Currency Offer, a strategy that moved a large number of investors.
Participation in the project will be costly for celebrities, since Mayweather will have to return $ 300,000, received by Centra Tech, to the regulatory authorities with the obligation to place it within 20 days in the State Treasury.
In addition to reimbursement, Mayweather will pay a fine of US $ 300,000 and biased interest expenses estimated at US $ 14,775.According to the SEC decree, a boxer is prohibited from promoting “any digital or other value” for three years and will continue to appear before the authorities to provide more information about his case, which is still in process.
Hlaed will have to return the received 50,000 US dollars to promote ICO and must pay a fine of 100 thousand dollars and court fees are estimated at $ 2,725. A DJ is also forbidden to advertise values on their social networks for two years.
Both reports assert that if the fines are not paid, they will accumulate with interest in the civilian fines of each individual. Similarly, they also stressed that the charges were brought against both individuals, because in 2017, before they decided to participate in the ICO, the authorities found out that cryptocurrencies could be sold as securities and, therefore, SEC rules should be subjected.
Recommended snapshot from Yingko / stock.adobe.com