2017 was a critical year for cryptocurrencies. It saw the likes of Bitcoin and Ethereum hitting their all-time highs. The emergence of numerous cryptocurrency hedge funds and ICO’s contributed to this trend which in turn contributed to a public lust for cryptocurrency investment.
With ‘crypto-mania’ reaching its peak in 2017, naturally celebrities and the famous had to get involved. Most notably, an ICO by Centra saw both Floyd Mayweather and DJ Khaled move for the positions of ambassadors for the company in a move to boost their ICO.
Tuesday saw the United States Securities and Exchange Commission (SEC) charge the founders of the Centra ICO after allegations of fraud aroused suspicious against the company. According to the SEC, founders of Centra; Sohrab Sharma and Robert Farkas had managed to raise $32million in funds for the ICO through the use of a dishonest marketing campaign. Part of this, included the installation of celebrities Floyd Mayweather and DJ Khaled.
The SEC had accused Centra of deceiving potential investors into thinking that by investing within their ICO, they would have access into helping Centra develop new technologies in partnership with other legitimate companies.
Centra had also made false claims that both MasterCard and Visa would be partnering up with them for the production of a new payment card, exclusive to Centra’s customers and investors. This false partnership was just one of the key selling points used by the Centra team in the promotion of their ICO.
The law-suit filed by the SEC against Centra claims that the deceit affected vast numbers of innocent people. The SEC did not make any mention of the two celebrities who were promoting the ICO although it is assumed that as brand ambassadors, they did have some input into how the ICO would be marketed.
The SEC did however give a fair warning to all celebrities who wish to take part in promotional activities for ICOs, reaffirming that often, ICO’s can be related to fraudulent activities.
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