Get the Finder app 🥳

Track your credit score, free

Free

DJ Khaled and Floyd Mayweather penalised for Centra crypto shilling

Posted: 30 November 2018 1:28 pm
News

Like many, Khaled and Mayweather seem to have lost money by getting involved with Centra.

First things first, an endorsement from Floyd Mayweather is apparently worth more than one from DJ Khaled. That's according to an SEC release detailing the SEC's "first cases to charge touting violations involving ICOs".

Mayweather, it says, failed to disclose promotional payments from 3 ICO issuers including US$100,000 from Centra Tech and US$200,000 for 2 other ICOs. DJ Khaled, meanwhile, failed to disclose a US$50,000 payment from Centra Tech.



Settling down

Without admitting or denying the findings, Mayweather and Khaled agreed to pay penalties. Mayweather got punched by a total penalty of about US$615,000, while Khaled paid a total of about US$150,000. They also agreed not to promote any securities for three and two years respectively.

juicy crypto words

For its part, Centra Tech has since rebranded to Phantom, not to be confused with Fantom, and has sharply criticised the SEC's investigations into it, while maintaining that it attempted to refund ICO participants through the SEC several times, but kept getting knocked back.

"Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements," said Division of Enforcement co-director Steven Peikin.

But if you really must make crypto purchasing decisions based on celebrity endorsements, a historically safer option might be to do the exact opposite of what the celebrities say, because the cryptocurrencies they endorse tend to go bad with disproportionate regularity.

"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," Peikin said.

"These cases highlight the importance of full disclosure to investors," said Division of Enforcement co-director Stephanie Avakian. "With no disclosure about the payments, Mayweather and Khaled's ICO promotions may have appeared to be unbiased, rather than paid endorsements."

As the first time such ICO promoters have been charged for failing to disclose their financial interests in the projects they tout, these penalties could signify a shift towards more transparency in the crypto space. A lot of USA-based crypto promoters might be re-examining their positions and disclosures right about now.


Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

Crypto explained


Latest cryptocurrency news

Picture: Shutterstock

Latest crypto guides

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site