Cryptocurrency & Blockchain Business

Floyd Mayweather & DJ Khaled charged by SEC for promoting ICOs without disclosing payments

Reported by CNBC, pro boxer Floyd Mayweather and music producer DJ Khaled pumped up initial coin offerings without telling investors they were getting paid a promotional fee, according to a settlement announced Thursday.

The Securities and Exchange Commission said they are the first cases to charge touting violations regarding ICOs, a relatively new phenomenon that has attracted billions of investor dollars to new cryptocurrencies, often with little to back them up.

Mayweather didn’t disclose a $100,000 promotional payment from Centra Tech Inc., while Khaled didn’t disclose a $50,000 payment.

The two men settlement the charges without admitting or denying the findings. The SEC says its investigation is ongoing.

Mayweather touted Centra’s ICO on his Twitter account saying it “starts in a few hours. Get yours before they sell out, I got mine.” Khaled called it a “game changer” on his social media accounts, the SEC said.

Mayweather also failed to disclose $200,000 he was paid to promote two other ICOs. He posted on his Instagram account that he would make a large amount of money on another ICO. On Twitter he boasted “You can call me Floyd Crypto Mayweather from now on.”

The SEC warned last year that coins sold in ICOs may be securities and that those who offer them have to comply with federal securities laws. Earlier this year, the agency filed civil charges against Centra’s founders, saying the ICO was fraudulent. The Justice Department filed parallel criminal charges in that case.

Mayweather will pay $300,000 in disgorgement, a $300,000 penalty and $14,775 in interest. Khaled will pay $50,000 in disgorgement, a $100,000 penalty and $2,725 in interest. Mayweather also agreed not to promote securities for three years and to cooperate with the investigation and Khaled agreed to a two year ban.

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