The United States Securities & Exchange Commission (SEC) has charged boxing legend Floyd Mayweather Jr. and hip-hop artist DJ Khaled with unlawfully promoting Initial Coin Offerings (ICOs). The two celebrities failed to disclose promotional payments they received from various ICOs.
A report via CoinTelegraph on Thursday (Nov. 29) indicates that Mayweather failed to disclose the promotional payments he received from three different ICOs. That includes a $100,000 payment from Centra Tech, a cryptocurrency startup company. DJ Khaled also failed to disclose a $50,000 payment from Centra Tech.
In May of this year, the three co-founders of Centra Tech were indicted after they were found to have run a fraudulent ICO. That ICO raised approximately $32 million from investors over 2017.
Mayweather and Khaled made public statements regarding their use of a Titanium Centra card in September and later in 2017. Khaled publicly informed his massive Instagram audience that he had recently acquired the Titanium Centra Card. Weeks before that, Mayweather was indicating he was using the card to use various digital currencies including Bitcoin or Ethereum for business purposes.
Neither celebrity admitted to or denied the charges against them. However, Floyd Mayweather Jr. and DJ Khaled have agreed to pay fees and restrictions as a result of the charges. Mayweather has agreed to pay $300,000 in disgorgement fees, along with a $300,000 penalty and prejudgment interest in the amount of $14,775. DJ Khaled has agreed to pay disgorgement of $50,000, a penalty of $100,000, and prejudgment interest in the amount of $2,725.
Mayweather has also made some other agreements as a result of the ICO charges. The boxing star will help in the investigation and has also agreed he won’t promote any securities over the next three years. Khaled will not participate in securities promotional activities for the next two years.
The SEC continues to warn the public to be cautious when seeing promotional posts from celebrities about securities or investment advice. Last November, the SEC even issued a warning that some ICOs being endorsed by celebrities might even be illegal. In addition, the SEC said that celebrities could be in violation of “anti-touting” laws if they were promoting token sales and failed to disclose the payments they were getting for their endorsements.
