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Cryptocurrencies

SEC stops celebrity-endorsed ICO, charges founders with fraud

Tuesday 3 April 2018 | 10:26 AM CET

The US Securities and Exchange Commission has stopped an initial coin offering (ICO) and charged its founders with “orchestrating a fraudulent ICO,” according to CoinDesk.

The agency charged Sohrab Sharma and Robert Farkas, the co-founders of Centra Tech, with fraud after they raised USD 32 million by selling “unregistered securities.” While the ICO startup claimed the funds would go toward developing financial products backed by Visa and Mastercard, the SEC said Centra had no relationship with either payment card network.

Moreover, Sharma and Farkas created false marketing material, including fictional executives, according to the agency. Also, the founders paid celebrities to promote the ICO. These celebrities appear to include boxing champion Floyd Mayweather, who endorsed Centra in September 2017, though his Instagram post has since been removed.

Centra and its co-founders were also the targets of a class-action lawsuit filed in December 2017, which claimed that the startup’s CTR token was essentially an unregistered security, the online publication added.

More: Link
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