Floyd Mayweather-Backed ICO Co-Founders Arrested for Fraud
In what is turning into a real cautionary tale for the cryptocurrency community about the need to be wary of celebrity's power, along with skepticism about most initial coin offerings (ICOs), the US Securities and Exchange Commission (SEC) announced an ICO endorsed by champion boxer Floyd Mayweather has officially been deemed a fraud.
The Cautionary Tale of Floyd Mayweather's Entrance into the ICO Scene
SEC Halts Fraudulent Scheme Involving Unregistered ICO is the unambiguous title of an SEC press release issued 2 April 2018. "The Securities and Exchange Commission today charged two co-founders of a purported financial services start-up with orchestrating a fraudulent initial coin offering (ICO) that raised more than $32 million from thousands of investors last year. Criminal authorities separately charged and arrested both defendants," the notice begins.
Centra Tech Inc. co-founders Robert Farkas and Sohrah 'Sam' Sharma are alleged to have "masterminded a fraudulent ICO in which Centra offered and sold unregistered investments through a CTR Token. Sharma and Farkas allegedly claimed that funds raised in the ICO would help build a suite of financial products. They claimed, for example, to offer a debit card backed by Visa and Mastercard that would allow users to instantly convert hard-to-spend cryptocurrencies into U.S. dollars or other legal tender," the SEC complaint outlines.