Floyd Mayweather Jr., DJ Khaled Fined by SEC for ICO Promotion


Total News – Atlanta, GA 11/30/2018. The Securits and Exchange Commission has announced on Thursday that it settled charges against Floyd Mayweather and DJ Khaled for not disclosing that they were paid to promote an Initial Coin Offering (ICO).

Professional boxer Floyd Mayweather failed to disclose promotional payment from three ICO issuers, including $100,000 from Centra Tech Inc., as well as $200,000 from Stox and Hubii Network. Music producer DJ Khaled failed to disclose a payment of $50,000 from Centra Tech Inc.

Earlier this year, the three co-founders of Centra Tech – Sohrab Sharma, Raymond Trapani, and Robert Farkas – have all been indicted by a grand Jury for fraud and conspiracy.

Enforcement Division Co-Director Stephanie Avakian stated: 

"These cases highlight the importance of full disclosure to investors. With no disclosure about the payments, Mayweather and Khaled's ICO promotions may have appeared to be unbiased, rather than paid endorsements."

Mayweather previously tweeted to his 7.8 million followers that Centra's ICO "starts in a few hours. Get yours before they sell out, I got mine…". Khaled wrote on his social media accounts that the coin was a "Game changer." Mayweather has 22 million Instagram followers while DJ Khaled has almost 13 million followers on Instagram and 4 million on Twitter.

Both parties did not admit or deny the charges, however, they agreed to pay disgorgement, penalties and interest. Mayweather agreed to pay $300,000 in disgorgement, $ 300,000 in penalty, and $14,775 in prejedgment interest. DJ Khaled agreed to pay $50,000 in disgorgement, a $100,000 penalty, and $2,725 in prejudgment interest.

Moreover, Mayweather agreed to continue to cooperate with the investigation and agreed not to promote any securities for three years. DJ Khaled has been banned from promoting securities for two years.

Steven Peikin, SEC Enforcement Division Co-Director commented:

"Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements. 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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