SEC Charges Floyd Mayweather, DJ Khaled With Illegally Promoting Initial Coin Offerings
The SEC settled charges with boxer Floyd Mayweather and music producer DJ Khaled for failing to disclose payments they received for touting investments in initial coin offerings, the agency announced Thursday.
Mayweather and Khaled failed to disclose promotional payments from Centra Tech, which paid Mayweather $100,000 and Khaled $50,000. Khaled called Centra a “game changer” on his social media accounts, while Mayweather tweeted to his followers about its ICO, saying it “starts in a few hours. Get yours before they sell out, I got mine…”
“Without admitting or denying the findings, Mayweather and Khaled agreed to pay disgorgement, penalties and interest. Mayweather agreed to pay $300,000 in disgorgement, a $300,000 penalty, and $14,775 in prejudgment interest,” the SEC said in a statement. “Khaled agreed to pay $50,000 in disgorgement, a $100,000 penalty, and $2,725 in prejudgment interest.”
The SEC has been cracking down on ICOs, which have quickly gone from a sudden investment fad to one of the agencies top enforcement policies. ICOs involve the sale of digital tokens related to blockchain projects. While some of those projects are at or near completion, many others turned out to be scams.
Earlier this month, the SEC said it had opened “dozens of investigations” into ICOs and other cryptocurrency assets. Two weeks ago, the SEC announced it had reached settlements with two companies that sold tokens in ICOs, with together raised $27 million from the ICOs.
In April, the SEC also charged Centra’s founders with fraud, saying that the $32 million the ICO raised with the help of Mayweather and Khaled was “a sophisticated marketing campaign to spin a web of lies about their supposed partnerships with legitimate businesses.”