Floyd Mayweather and DJ Khaled resolved the cases brought by the Securities and Exchange Commission claiming that they did not disclose the payments received to promote the first cryptocurrency money (ICO) offers on social media.
Mayweather and Khaled agreed to pay multiple fines totaling over $ 750,000. Which will not be exactly the rupture for the highest paid athlete in the previous world or the superstar music producer, but it is still very steep.
An SEC press release describes their transgressions and punishments.
SEC orders found that Mayweather did not disclose the promotional payments of three ICO issuers, including $ 100,000 from Centra Tech Inc., and that Khaled did not disclose a $ 50,000 payment from Centra Tech, which he advertised on his account. social media as "Game change" ".
Mayweather's promotions included a message to her followers on Twitter that Centra's "ICO" starts in a few hours, get yours before they run out, I have mine … "
A post on Mayweather's Instagram account predicted that he would make a large amount of money on another ICO and a Twitter post said, "You can call me Floyd Crypto Mayweather from now on." The SEC order found that Mayweather did not disclose that he had been paid $ 200,000 to promote the other two ICOs.
Mayweather agreed to pay $ 300,000 in disgorgement, a fine of $ 300,000 and $ 14,775 in injury interest. Khaled agreed to pay $ 50,000 in disgorgement, a penalty of $ 100,000 and $ 2,725 in injury interest.
Centra has been charged separately by the SEC for an allegedly fraudulent initial supply of money. Watch Khaled promote the app wallet of the encrypted company below.
As part of their agreement, Mayweather and Khaled agreed not to promote any titles, including digital ones, for three and two years, respectively.
The case is a landmark in the world of cryptocurrency, as it is the first time the SEC has filed charges against individuals to promote ICOs.
"These cases highlight the importance of full disclosure to investors," said co-director of the Enforcement Division Stephanie Avakian.
"Without any payment disclosure, Mayweather and Khaled & # 39; s ICO may have appeared to be impartial rather than paid endorsements."
"Investors should be skeptical of investment advice published on social media platforms and should not make decisions based on celebrity specializations," added co-director of Enforcement Steven Peikin.
"Social media influencers are often paid promoters, not investment professionals, and the titles they are promoting, regardless of whether they are issued using traditional or blockchain certificates, could be frauds."