SEC charges Floyd Mayweather, DJ Khaled with cryptocurrency fraud
cosinart/iStock/Thinkstock(WASHINGTON) — Professional boxer Floyd Mayweather and music prodcer DJ Khaled were charged with failure to disclose payments received for promoting inital coin offerings (ICOs) by the Securities and Exchange Commission.
The cases are the first two by the SEC related to ICOs. The agency found that the two celebrities received thousands of dollars from issuers, including Centra Tech Inc., to tout their offerings. Mayweather’s posted promotions on Twitter and Instagram predicting he would earn big money on the investment, telling followers to “get yours before they sell out.”
Khaled, meanwhile, called Centra Tech’s coin offering “a game changer.”
Mayweather has agreed to pay $300,000 in disgorgement, a $300,000 penalty and nearly $15,000 in interest. He also agreed not to promote any security for three years. Khaled agreed to similar, but lesser, penalties.
“Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements,” said SEC Enforcement Division Co-Director Steven Peikin. “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.”
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