The Securities and Exchange Commission (SEC) suspended the ICO of the cryptocurrency project called Centra Tech, which was once advertised by the multiple world boxing champion Floyd Mayweather. The office accuses the startup of "organizing a fraudulent ICO", the report said.
Co-founders of Centra Tech Sohrab Sharm and Robert Farkas also accuse the SEC of appropriating $ 32 million "obtained through the sale of unregistered securities."
According to the SEC, the start-up promised to send funds received during the ICO to "develop financial products supported by Visa and Mastercard", but in reality Centra Tech did not have any working relationship with these companies. In addition, according to the Commission, Sharma and Farkas were engaged in the creation and dissemination of "false advertising materials, including information about fictitious officials."
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.
Co-director, SEC Division of Enforcement
The SEC documents also state that the founders of Centra Tech paid various celebrities for the promotion of the ICO, including Floyd Mayweather, who supported the project in September 2017. However, the corresponding post in Instagram has already been deleted.