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SEC says Floyd Mayweather Jr. and DJ Khaled illegally promoted ICOs

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Floyd Mayweather DJ Khaled
The Securities and
Exchange Commission charged DJ Khaled, second from left, and
Floyd Mayweather Jr., second from right, with illegally promoting
an initial coin offering without disclosing that they were paid
for it.

Getty/Kevork
Djansezian


  • 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.
  • The SEC charged Mayweather and Khaled with promoting an
    initial coin offerings (ICOs) without disclosing that they were
    paid for them.
  • Both Mayweather and Khaled touted the ICO of Centra Tech,
    which was later alleged to have been a scam.

Floyd Mayweather Jr. and DJ Khaled were two of the most
well-known celebrities to jump on the cryptocurrency bandwagon
last year. 

Now their promotion of particular initial coin offerings has
gotten them in trouble. 

Mayweather, a former boxing champion, and Khaled, a record
producer, will each pay more than $100,000 in fines to settle
charges that they illegally promoted an initial coin offering
without disclosing that they were paid for it, the Securities
and Exchange Commission announced
Thursday. They also both
agreed to forgo promoting any other ICOs or stocks for multiple
years, the SEC said.

“These cases highlight the importance of full disclosure to
investors,” Stephanie Avakian, co-director of the SEC’s
enforcement division, said in a statement. “With no disclosure
about the payments, Mayweather and Khaled’s ICO promotions may
have appeared to be unbiased, rather than paid endorsements.”

Neither Mayweather nor Khaled admitted to or denied the
charges. 

They touted an ICO that officials say was a scam

Mayweather and Khaled were both paid by Centra Tech to to tout
its controversial ICO last year, according to the SEC. Centra
Tech paid Mayweather $100,000 and Khaled $50,000, the agency
said. Both then
promoted the ICO on their social media accounts to their
followers
, but neither disclosed that they were being paid to
tout it, the SEC said.

Centra was supposed to be developing a debit card for
cryptocurrencies. But federal law enforcement officials say it
was really a fraudulent scheme, and have filed civil and criminal
charges against its founders.


Read this:

The SEC charges a third Centra cryptocurrency ‘mastermind’ with
fraud over its $32 million ICO

Mayweather also was paid $200,000 to tout two other ICOs and
failed to disclose the payments, according to the SEC. 

As part of his settlement, Mayweather will hand over to the SEC
the $300,000 he was paid to promote the three ICOs, pay a
$300,000 fine, and pay $14,775 in interest, according to the
agency. Khaled agreed to hand over the $50,000 he was paid by
Centra and pay both a $100,000 fine and $2,725 in interest.

Mayweather will be barred from touting ICOs or other securities
for three years; Khaled for two. Additionally, Mayweather will
cooperate with the SEC’s investigation of Centra, the agency
said.

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