TWO OF THE WORLD'S great playaz have had their Crystale budget cut after being found guilty of unlawfully promoting cryptocurrencies in a first such case in the US.
As the crypto market continues to seemingly freefall, boxer Floyd Mayweather and DJ, DJ Khaled (real name Khaled Khaled, for realsies) have agreed to pay fines of $767,600 to the Security and Exchange Commission (SEC) after it found the two had received payment to promote an Initial Coin Offering (ICO) from a company called Centra Tech.
Last year, the SEC warned that payments to promote crypto could be viewed as securities, and as such, failure to declare payments would be seen as a breach of relevant laws.
"Investors should be sceptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements," said Enforcement Division Co-Director Steven Peikin.
"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."
Mayweather told followers Centra's ICO ‘starts in a few hours. "Get yours before they sell out, I got mine…" according to the filing which also cites Khaled as describing the currency as a "gamechanger".
Mayweather also told his Insta followers, "You can call me Floyd Crypto Mayweather from now on."
This was not his first offence. He was paid $200,000 to promote two other cryptocoins, according to the ruling.
"These cases highlight the importance of full disclosure to investors," said Enforcement Division 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."
Both parties have agreed to pay up, but will not be forced to declare themselves innocent or guilty of the allegations. Mayweather has agreed not to promote a cryptocurrency for three years. Khaled has made a similar agreement for two years.
The SEC's investigation into crypto promotion continues. μ
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