Business

Erik Gibbs

Floyd Mayweather, DJ Khaled facing lawsuit over ICO

Floyd Mayweather may be a champ in the boxing ring, but he might need a little more practice in cryptocurrency. This past April, an initial coin offering (ICO) he was promoting was shut down for security fraud by the U.S. Securities and Exchange Commission (SEC). Now, the undefeated pugilist might have to respond personally for his involvement.

According to a report published by TMZ, Mayweather faces a lawsuit from investors over the ICO for the Centra Tech crypto startup. They claim that the he is personally responsible, in part, for the millions of dollars lost by investors when the digital currency fizzled.

Mayweather promoted the cryptocurrency in person and through his social media accounts. On several occasions, he published pictures of himself holding the Centra debit card in an effort to attract customers to the company. He also repeatedly used the phrase, “You can call me Floyd ‘Crypto’ Mayweather from now on,” when providing publicity for Centra Tech.

Centra’s CTR digital currency was supposedly to be used to allow the company to offer a range of products, including the debit card. It attracted thousands of investors during the ICO, all of which have had to watch as the token became virtually useless.

The boxer isn’t the only high-profile celebrity caught up in the scandal. DJ Khaled, a music DJ and record producer, is also named in the lawsuit. Like his fellow backer, he would often appear sporting the Centra debit card and also referred to the company as a “game changer” in the cryptocurrency space.

During its 2017 ICO, the company raised $32 million from its ICO. However, Centra Tech founders, Robert Farkas and Sohrab Sharma, were arrested in April following an investigation by the SEC. The commission alleged that the company was operating illegally and had misled investors regarding its legitimacy. Among other things, it had released promotional material claiming company executives that didn’t actually exist and falsely linking itself to credit card giants Visa and MasterCard.

The lawsuit aims to see the investors recuperate their lost funds. The two Centra founders are also named in the suit, and are still looking at facing a judge over securities and wire fraud, as well as conspiracy charges.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.

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