The American SEC charges two celebrities for pumping up ICOs without letting investors know they were paid off for promotion. These celebs are a media personality and record producer DJ Khaled as well as a professional boxing promoter and boxer Floyd Mayweather.
Both at a different time spread the word about ICOs on social media, neither of them appeared to be fair with the audience.
First Time Charging for Touting Violations
The American securities watchdog says it is the first time it charges someone for violating touting policies in the case of ICOs. As CNBC informs, DJ Khaled did not disclose to ICO investors that he gained a $50,000 reward for promotion. Mayweather’s payment was as twice as big as Khaled’s — $100,000.
Each of them touted ICOs on social media. For instance, DJ Khaled called Centra’s ICO «game changer», while Mayweather promoted it in a tweet saying “starts in a few hours. Get yours before they sell out, I got mine,» as per SEC.
The commission has also stated that both men are neither acknowledging nor disclaiming the findings. At the same time, the investigation has not been completed.
Not The Only Problem
Centra’s ICO has not been Mayweather’s only issue. The pro boxer did not also unveil he was given $200,000 to back up two other ICOs. He promoted them on Instagram and Twitter, «boasting» he would make a lot of money on an ICO and that he could be called «Floyd Crypto Mayweather».
As for the penalty, the boxer will have to pay $300,000 as well as nearly $15,000 in interest. On top of that, he will have to pay $300,000 in disgorgement. As for Khaled, his charges are $100,000, nearly $3,000 and $50,000 respectively.
Moreover, Mayweather agreed not to back securities for three years, whereas Khaled faced the two-year ban. The former also promised to help the ongoing investigation.
The securities agency had already warned that tokens vended in ICOs might be securities, therefore, people who deal with them have to obey the respective legislation. Some months ago the watchdog also charged the founders of Centra pointing the ICO was a scam.