SEC Cracks Down on Crypto Fraud

Since questions were raised about Centra, Mayweather has deleted some posts in connection to the ICO. Co- Founders Sohrab Sharma and Robert Farkas were caught while they tried fleeing the country. According to SEC after investigation, there was no agreement between Centra Tech, and Visa or MasterCard existed.

Sohrab Sharma and Robert Farkas who are now heading the infamous Centra Tech Coin were reprimanded and arrested by the authorities a day before when they were all set to leave the country.

The US Securities Exchange Commission's new Cyber Unit task force has taken down boxing great Floyd Mayweather's sponsor, Centra Tech, alleging their ICO was based on fraudulent products and made up biographies.

DJ Khaled, pictured above, previously endorsed Centra's ICO. It also charged that the payment card was claimed in the ICO to be backed by Visa and MasterCard even though the company had zero relationship with either, and that the ICO promotion material included fictitious company executives and other false and misleading materials.

Then, a month later, Sharma and Trapani stepped down from the company, but Farkas remained.

According to the SEC, the pair allegedly claimed that the funds raised in the ICO would build financial products, including a Visa or Mastercard-backed debit card that can instantly convert cryptocurrencies into USA dollars or other legal tender.

"We allege that Centra sold investors on the promise of new digital technologies by using a sophisticated marketing campaign to spin a web of lies about their supposed partnerships with legitimate businesses", Stephanie Avakian, codirector of the SEC's Division of Enforcement, said in a statement.

The SEC complaint alleges both that the Centra ICO was an unregistered securities offering and that its co-founders "engaged in fraudulent conduct and made material misstatements and omissions created to deceive investors".

In addition to Mayweather, the Centra hired DJ Khaled to promote the ICO, though neither celebrity was named in the indictment. The complaint seeks permanent injunctions, return of the allegedly stolen funds plus interest and penalties, as well as bars against the two figures from taking part in any other ICO or securities offering. The SEC clarified in March that it is looking to apply securities laws to cryptocurrency exchanges and wallets. Through which they raised around $32 million from an ICO using their CTR coin during 19th September and 5th October. These companies went ahead and forwarded cease letters that made the company come under the radar of the SEC officials.

  • Rosalie Stanley