US Securities Regulator Slaps Penalties Vs Floyd Mayweather Jr., DJ Khaled for Hyping Dubious ICOsNov 30, 2018 at 19:00
The United States’ Securities and Exchange Commission (SEC) has announced it reached a settlement with boxer Floyd Mayweather Jr. and music producer DJ Khaled who failed to disclose payments they received in promoting investments in initial coin offerings (ICOs).
Described as the first cases involving celebrities promoting ICOs, the SEC said Mayweather withheld information on receiving payments from three ICO issuers in exchange for hyping the event. Mayweather reportedly got paid $100,000 from Centra Tech Inc. and $200,000 to promote two other fund raisers.
On the other hand, Centra Tech allegedly paid Khaled $50,000 to promote its ICO, according to the SEC.
Without admitting or denying the findings, the personalities agreed to pay penalties slapped by the SEC. The undefeated boxer agreed to pay $300,000 in disgorgement, a $300,000 penalty and $14,775 in prejudgment interest while Khaled agreed to pay $50,000 in disgorgement, a $100,000 penalty and $2,725 in prejudgment interest.
The regulator also imposed a three-year ban on promoting securities, digital or otherwise, on Mayweather, and a similar two-year ban on Khaled.
The SEC pointed out that when the celebrities shared very promising words for the ICOs through their social media accounts, they ought to disclose that they were paid to do the endorsement.
SEC enforcement division co-director, Stephanie Avakian, expressed that the cases “highlight the importance of full disclosure to investors” as Mayweather and Khaled’s promotion was made to appear as “unbiased, rather than paid endorsements.”
“Investors should be skeptical of investment advice posted to social media platforms and should not make decisions based on celebrity endorsements. 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,” Steven Peikin, the agency’s enforcement division co-director, added.
Earlier, DisruptBlock made a list of ICOs and cryptocurrencies that are connected to celebrities. Mayweather and Khaled’s involvement was already filed back then as a bad investment