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SEC Halts Mayweather-Backed ICO Over Alleged Fraud

The U.S. Securities and Exchange Commission has halted an initial coin offering and charged its founders with “orchestrating a fraudulent initial coin offering,” the regulator said Monday night.

The agency said it charged Sohrab Sharma and Robert Farkas, the co-founders of Centra Tech, with fraud after they raised $32 million by selling “unregistered securities.”

While the ICO startup claimed the funds would go toward developing financial products backed by Visa and Mastercard, the SEC said Centra had no relationship with either payment card network. The agency further stated that Sharma and Farkas created false marketing material, including fictional executives.

Notably, the SEC also alleges that the founders paid celebrities to promote the ICO. These celebrities appear to include boxing champion Floyd Mayweather, who endorsed Centra in September 2017, though his Instagram post has since been removed.

In a press release, SEC Division of Enforcement co-director Steve Peikin stated:

“As we allege, the defendants relied heavily on celebrity endorsements and social media to market their scheme. Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors.”

Centra and its co-founders were also the targets of a class-action lawsuit filed in December 2017, which claimed that the startup’s CTR token was essentially an unregistered security.

The SEC said both Sharma and Farkas were arrested and charged by law enforcement officers.

Floyd Mayweather image via Shutterstock

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Floyd Mayweather Continues Hoisting up Crypto – ICO incomes

The Initial Coin Offering by the startup Centra which will be held on Sep 19, 2017 is being promoted by Boxing Champion Floyd Mayweather.

The boxer recently has entered the crypto-scene announcing on different social media platforms like Instagram or Twitter about him believing in digital currencies and their projects. This promotion on the other side is very contrary to the governments and regulations movement around the world against the way that startups raising funds have been going until now.

Via his twitter account, Floyd Mayweather appeared using a Titanium Centra card and already spending Bitcoins, Ethereum and other altcoins for his transactions – According to the boxer. In this case Centra is targeting to launch a debit card for virtual currency user on the commercial market following its ICO.

floyd mayweather crypto ico

Following the market project STOX and the media tech company Hubii Network, Centra’s ICO is the third ICO that is promoted by Mayweather in the past months. However, there is a lot of competition when it comes to Debit Card related projects like Centra so time will tell.

As stated above, the marketing done by the world champion is happening while a system change in a global scale when it comes to startups fundraising. SEC – Securities and Exchange Commission form the US, is raising its efforts to scrutinize the cryptocurrency market.

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Floyd Mayweather Stumps for Crypto Credit Card in Latest ICO Promotion

Amidst the current crackdown on initial coin offerings (ICOs) in China and around the globe, some cryptocurrency fans are holding strong.

International boxing star Floyd Mayweather, for one, posted yet another image on social media citing his allegiance to an ICO yesterday.

No industry novice, this is the third social media post Mayweather has made promoting an ICO over the last month. The ICO in question this time is called Centra, a crypto credit card startup which is holding a coin offering later this month. 

An earlier tweet suggests he is working with a digital marketing company called the Crypto Media Group, which as reported by Vice, is seeking to court celebrity endorsements for cryptocurrencies. 

Spurred by similar interest in the industry, Paris Hilton also promoted an ICO on Twitter earlier this month, however the celebrity heiress was careful to emphasize that it was “#NotAnAd,” in reference to her supposed industry expertise.

Floyd Mayweather via Flickr

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.