Floyd Mayweather and DJ Khaled have both agreed to pay six-figure sums relating to their promotion of Initial Coin offerings
You should have figured out by now that 2018 is confusing as hell, and there’s no such thing as a news story from this year which is too bizarre to be believable.
After all, this is the year we encountered a football club faking a player’s death without his consent, and a snake eating a pigeon on an East London street, so nothing feels beyond the realms of possibility.
With that in mind, the idea that DJ Khaled and Floyd Mayweather have been handed ‘substantial’ fines for allegedly failing to declare accepting money to promote cryptocurrencies seems almost normal in comparison.
According to the US Securities and Exchange Commission (SEC), both have agreed to pay six-figure sums after encouraging people to invest in Initial Coin Offerings (ICOs) without revealing they had been paid to make the endorsements.
“With no disclosure about the payments, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements,” the SEC’S Stephanie Avakian 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,” Enforcement Division Co-Director Steven Peikin added.
Both the boxer and the music producer are alleged to have taken payment from ICO issuers including Centra Tech Inc, which raised $32m in an ICO after social media endorsements from Mayweather and Khaled.
Sam Sharma and Robert Farkas, two of Centra’s co-founders, had multiple charges brought against them in April 2018, including conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud and wire fraud.
Mayweather posted a tweet in September 2017 saying “Centra’s (CTR) ICO starts in a few hours. Get yours before they sell out, I got mine”, while DJ Khaled – real name Khaled Khaled – posted about receiving a “titanium centra debit card” in the same months.
Tweets from both are still visible at the time of writing, though an Instagram post from Khaled appears to have been taken down.
As Alvakian’s statement reads: “We allege that Centra sold investors on the promise of new digital technologies by using a sophisticated marketing campaign to spin a web of lies about their supposed partnerships with legitimate businesses.
“As the complaint alleges, these and other claims were simply false.”
Floyd: stick to boxing non-boxers for cash, and Khalid, don’t you make enough from product placement already?