Boxing champion Floyd Mayweather Jr. and record producer DJ Khaled will pay hundreds of thousands of dollars in penalties to settle charges filed against them by the Securities and Exchange Commission. Get yours before they sell out.
Centra wasn't the only ICO Mayweather touted, either; he was paid $200,000 to promote two others, without disclosing any of these payments.
"These cases highlight the importance of full disclosure to investors", said Enforcement Division Co-Director Stephanie Avakian.
The promotions followed a 2017 report warning that coins sold as ICOs may be classed as securities and that anyone selling or promoting them should comply with federal securities laws that mandate anyone promoting a sale disclose their financial relationship to the company.
Mayweather failed to disclose that he'd received $300,000 from three different ICO issuers, including $100,000 from Centra Tech.
These are the SEC's first cases of these particular violations.
Crypto Ruling: Floyd Mayweather, DJ Khaled Sucker Punched By SEC
If only someone had told that to Mayweather and DJ Khaled. One of those companies was Centra Tech, a company that has been separately charged by the SEC for a fraudulent ICO.
Floyd Mayweather Jr. and DJ Khaled were two of the most well-known celebrities to jump on the cryptocurrency bandwagon past year. The U.S. Attorney's Office for the Southern District of NY followed suit and filed parallel criminal charges.
The SEC added that Mayweather will continue to cooperate with its investigation, which is ongoing.
These charges sent ripples across social media, as many other celebrities have also promoted ICOs. Mayweather agreed to pay $300,000 in disgorgement, a $300,000 penalty, and roughly $15,000 in pre-judgement interest.
In addition, Mayweather agreed not to promote any securities - digital or otherwise - for three years.
"Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements", said Enforcement Division Co-Director Steven Peikin. Khaled will pay a $100,000 penalty, $50,000 in disgorgement (money paid back after being received via illegal or unethical business actions) and $2,725 in prejudgment interest.