DJ Khaled, Floyd Mayweather Jr. charged with promoting cryptocurrency without disclosing they were paid

Music producer DJ Khaled and boxer Floyd Mayweather Jr. were charged by the Securities and ...

Posted: Dec 1, 2018 7:08 AM
Updated: Dec 1, 2018 7:08 AM

Music producer DJ Khaled and boxer Floyd Mayweather Jr. were charged by the Securities and Exchange Commission with promoting investments in initial cryptocurrency coin offerings without revealing that they'd been paid.

The SEC has said that cryptocurrency coins sold in initial coin offerings (ICOs) may be considered securities and subject to federal securities laws.

Business, economy and trade

Celebrities

Digital currencies

DJ Khaled

Economy and economic indicators

Floyd Mayweather, Jr.

Government organizations - US

Internet and WWW

Money, banknotes and coins

Social media

Sports figures

Technology

US federal departments and agencies

US government independent agencies

US Securities and Exchange Commission

Both Khaled and Mayweather settled with the SEC and agreed not to promote any securities, even digital ones, for two years and three years, respectively, the SEC said Thursday. They also agreed to give the money they'd received to the SEC and pay penalties and interest.

Mayweather failed to disclose that he'd received $300,000 from three different ICO issuers, including $100,000 from Centra Tech. Khaled failed to disclose a payment of $50,000 from the same company.

Centra has separately been charged by the SEC, which alleged that its ICO was fraudulent.

Centra could not immediately be reached for comment.

Both Mayweather and Khaled promoted Centra's ICO on their social media accounts. Khaled called it a "game changer" while Mayweather encouraged his followers to get in on the ICO, saying he'd taken part.

Mayweather also commented on another ICO, saying he was going to make a lot of money.

"You can call me Floyd Crypto Mayweather from now on," he tweeted.

The SEC, which has made it clear that ICOs can be fraudulent, encourages would-be investors to be wary of those ICOs that are endorsed by celebrities.

"With no disclosure about the payments, Mayweather and Khaled's ICO promotions may have appeared to be unbiased, rather than paid endorsements," said SEC Enforcement Division co-director Stephanie Avakian.

"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," said Steven Peikin, another SEC enforcement division co-director.

This is the first time the SEC has brought charges against individuals for promoting ICOs and the investigation is ongoing.

Correction: The original headline of this article incorrectly stated the charges against Khaled and Mayweather Jr.

Article Comments

Mason City
Clear
wxIcon
Hi: 13° Lo: 10°
Feels Like: -8°
Albert Lea
Clear
wxIcon
Hi: 5° Lo: 5°
Feels Like: -8°
Austin
Clear
wxIcon
Hi: 9° Lo: 7°
Feels Like: 7°
Charles City
Clear
wxIcon
Hi: 14° Lo: 10°
Feels Like: -4°
Rochester
Clear
wxIcon
Hi: 5° Lo: 3°
Feels Like: -10°
Temperatures rebound tonight
KIMT Radar
KIMT Eye in the sky

Latest Video

Image

Local organizations set goals for 2020

Image

Local family benefits from holiday toy drive

Image

Sara's Daybreak Forecast - Wednesday

${item.thumbnail.title}

StormTeam 3: Keeping an eye on our next snow chance

Image

Hergert headed to the Phillies

Image

RPS moving forward with new school

Image

Tuesday's basketball and hockey highlights

Image

Baking for hospice patients

Image

Man rescued from river speaks

Image

Articles of Impeachment

Community Events