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Mayweather, DJ Khaled Settle with SEC over Cryptocurrency Marketing Charges

Posted byBy Daryl Nelson | Published on: CommentsComments (0)

Floyd Mayweather and DJ Khaled settled with the Securities and Exchange Commission on Thursday after they were charged with marketing cryptocurrency companies and not letting people know they were paid for it.

They’re also the first individuals, as opposed to entire companies, who’ve been slapped with such SEC charges.

Floyd Mayweather and DJ Khaled charged with cyrptocurrency fraud

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According to the SEC, when cryptocurrency is being promoted to bring in early investors, it falls under the securities category, so certain regulations have to be followed, which both men failed to do.

Mayweather has since agreed to stop promoting any kind of securities, financial or digital, for three years and Khaled for two years. Both also agreed to give the SEC payment they received from the cryptocurrency companies, plus pay penalties with interest.

CNN Business reports  that the retired fighter received $300,000 from three different companies, one of them being Centra Tech, who was charged by the SEC with establishing a fraudulent initial coin offering, which is known as an ICO. Khaled was paid $50,000 by Centra Tech.

The boxer and producer promoted the company on their social media accounts as well.

“You can call me Floyd Crypto Mayweater from now on,” Mayweather once tweeted. And Khaled said Centra Tech is a “Game changer.”

“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,” Steven Peikin, another Enforcement Division co-director, added.

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