Nobody gets away with fraud in the SEC’s eyes. The latest pair to be hit with SEC charges include pro-boxer Floyd Mayweather and music producer DJ Khaled.
SEC Charges Mayweather and Khaled
The Securities and Exchange Commission charged the pair with the improper promotion of initial coin offerings or ICOs for cryptocurrencies. Neither party revealed to investors that they were, in fact, paid large sums of money to promote certain ICOs.
According to CNBC, a settlement announced Thursday disclosed the charges. According to the settlement, Mayweather never spoke of a $100,000 promotional payment from crypto firm Centra Tech Inc. Khaled was a similar situation, with a $50,000 promotional fee for the same coin.
With statements about Centra Tech to his Twitter followers such as it “starts in a few hours. Get yours before they sell out, I got mine,” and “You can call me Floyd Crypto Mayweather from now on,” Mayweather is being charged for touting violations. Similarly, DJ Khaled called the ICO a “game changer” to his followers.
Mayweather’s undisclosed promotion stretches to other crypto ICOs too. According to the SEC, he was paid $200,000 to promote two others.
The issue was settled out of court; however, the pair will remain under investigation from the SEC. A direct result of the SEC charges will see Mayweather pay more than $600,000 in disgorgement and penalties. Khaled will pay over $150,000.
Both are also banned from promoting securities—Mayweather for three years, Khaled for two.
SEC Charges: ICO Scams
Cryptocurrencies have been tumbling in value in recent weeks according to coinmarketcap.com. Despite this, ICOs continue to pop up, and investors are putting billions of dollars behind them. Often regardless of the strength of the currency.
The SEC has continually struggled to regulate these new forms of currency. However, it remains vigilant against them. Recently in Colorado, regulators ceased 18 new ICOs in the month of November alone. The issue for the SEC is the number of scams that pretend to be ICOs and the lack of support for cryptocurrency as an actual asset.
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