Lawsuit targets ICO, promoted by Mayweather and DJ Khaled

Centra ICO, the startup, created to launch cryptocurrency deposit cards, is accused in offering and selling unregistered securities
18 December 2017   1201

Against the ICO project Centra a collective lawsuit of depositors was filed. The ICO is known to by promoted by famous boxer Floyd Mayweather and producer DJ Khaled. The project is accused of violating the US Securities Act, CoinDesk reports.

Defendants of the suit, which was filed on December 13, are Centra Tech, as well as Sohrab Sharma, Raymond Trapani, Robert Farkas and William Hagner. During the tokensale, they managed to raise $ 30 million to issue a crypto-currency debit card.

As the newspaper notes, the claim was filed a month after the project was abandoned by its two founders. In a post published on the Centra Tech blog on October 31, it says that Sohrab Sharma and Raymond Trapani left the project after the end of the tokensale.

...in connection with Centra Initial Coin Offering (the "Centra ICO"), Defendants raised over $30 million in digital cryptocurrencies by offering and selling unregistered securities in direct violation of the Securities Act.
 

Levi & Korsinsky Lawsuit

In addition, the organizers of Centra ICO are charged with misleading investors about the company's relationship with the payment services Visa and Mastercard, as well as in posting false information about its members on its website.

ICO Centra was actively promoted by boxer Floyd Mayweather and music producer DJ Khaled, but later they removed their messages on social networks. In this case, neither Mayweather nor DJ Khaled in the suit appear.

DJ Khaled Centra Promotion
DJ Khaled Centra Promotion
Floyd Mayweather
Floyd Mayweather Centra Promotion
 

In its last statement, Centra company denies all accusations in its address.

This lawsuit, which for the most part, appears to repeat unfounded claims regarding Centra Tech, alleges that Centra Tech’s initial coin offering of Centra Tokens was an unregistered sale of securities. The plaintiff’s complaint attempts to mimic claims and allegations the Securities and Exchange Commission has lodged against other cryptocurrency offerors. Centra Tech disputes the allegations in the complaint.
 

Centra ICO Statement

According to Coindesk team, a representative for Mayweather did not immediately respond to a request for comment.

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CFTC to Issue ICO Investor Advisory

Before buying coins, you need to thoroughly study their nature and understand what factors can affect their price, CFTC advises 
17 July 2018   104

The US Commodity Futures Trading Commission (CFTC) published a document with recommendations for potential investors in ICO projects and token buyers. This is reported by Coindesk.

The agency's document says that before buying coins, you need to thoroughly study their nature and understand what factors can affect their price.

Also, a potential buyer should remember that, depending on the structuring, some tokens can be derivatives, commodities or securities.

Buying digital coins or tokens only because you expect to sell them at a higher price later is the definition of speculation and carries considerable risk, regardless of how good a white paper, application or business plan sounds. Unfortunately, fraud is another significant risk to consider. Your best protection is to thoroughly research digital coins or tokens and exercise caution. 
 

CFTC ICO Advisory

The guide also states that before investing in the ICO, it is necessary to find information about the organizers of the project, and also to find out whether they themselves participate in their  ICO.

Representatives of the agency also refer to the study, according to which more than 50% of ICO start-ups ceased to exist during the first four months after the end of the token.