SEC Halts Mayweather-Endorsed ICO, Charges Founders With Fraud

The U.S. Securities and Exchange Commission has halted the Floyd Mayweather-supported Centra Tech initial coin offering.

AccessTimeIconApr 2, 2018 at 11:00 p.m. UTC
Updated Dec 11, 2022 at 7:48 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

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 Mayweatherhttps://www.shutterstock.com/image-photo/floyd-mayweather-jr-december-3-2015-617666765?src=hVmpdrrKmwzt5TVlAqmRiQ-1-88 image via Shutterstock

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.