Two founders of a cryptocurrency firm that was endorsed by champion boxer Floyd Mayweather have been charged with carrying out a fraudulent initial coin offering (ICO) by the U.S. Securities and Exchange Commission (SEC), writes CNBC.
The company in question is called Centra and it raised $32 million via an ICO. An ICO is a process by which a company can issue a new digital coin in exchange for money. The coin has the potential to be used on a service offered by the company or traded in the future.
Sohrab “Sam” Sharma and Robert Farkas, co-founders of Centra Tech. Inc., masterminded a fraudulent ICO in which Centra offered and sold unregistered investments through a “CTR Token,” the SEC alleged in a statement Monday.
The two people claimed to offer a debit card backed by Visa and Mastercard that allow people to convert cryptocurrency to U.S. dollars to spend it in stores. The SEC alleged that Centra had no relationship with either company. Sharma and Farkas created fake biographies of fictional executives and paid celebrities to tout the ICO on social media, the SEC claimed.
One of those celebrities, who was not named by the SEC, was boxer Floyd Mayweather. He posted a picture of himself in September 2017 holding a Centra card.
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