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Floyd Mayweather and Khaled Fined by the SEC

floyd mayweather

In 2017, Bitcoin almost reached $20K while the entire crypto market ballooned. Considering that Bitcoin only started at around $1,000, it captured the attention of mainstream media. And along with the popularity of cryptocurrencies is the emergence of ICOs. Some struggling companies even raised their funds via ICO by riding along the blockchain hype. But as 2018 entered, the crypto market had one of its biggest correction, and regulators are now looking to impose regulatory clarity within the niche.

Now, the US Securities and Exchange Commission is hunting down on entities that have sold unregistered ICOs. Recently, two companies were fined.

Celebrities Promoting ICOs

It has been reported that celebrities were making their own coins and even promoting cryptocurrencies. You have Ashton Kutcher who went to Ellen Degeneres to promote Ripple after it received a number of class lawsuits claiming that XRP is a security.

Also, you have the likes of Manny Pacquiao who announced his own token. As for Floyd Mayweather and Music DJ Khaled, they received $100,000 and $50,000 separately to promote an ICO from Centra Tech. Khaled even mentioned on social media that this ICO is a “game changer”. As for Mayweather, he even mentioned to potential investors that they should get theirs before it sells out.

According to the SEC, Mayweather did not report that he received $300,000 total from Centra Tech which is the sum of the payment for promoting the token. Centra Tech was separately charged for having a fraudulent ICO.

Both DJ Khaled and Floyd Mayweather paid a combined $767,500 in fines and penalties for promoting unlawful cryptocurrencies.

Classifying ICOs and Cryptos

A few months back, the agency considered Bitcoin along with Ethereum as commodities. As for ICOs, the agency mentioned that a lot would most likely be classified as securities. This is also the reason why crypto exchanges that have listed tokens classified as securities can also get into trouble with the SEC.

For Mayweather, he paid $614,775 to the SEC while DJ Khaled paid $150,275. And also, Mayweather agreed that he isn’t going to promote any securities both digital or otherwise for the next three years. As for Khaled, he agreed to a similar ban but for two years.

For enforcement division co-director Stephanie Avakian, “These cases highlight the importance of full disclosure to investors”. She also added that “With no disclosure about the payments, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements”.

For Steven Peikin who is the division’s other co-director, “Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements”. He also added that “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 the blockchain, could be frauds”.

However, it doesn’t really end here. The US attorney’s office for the southern district of New York also filed the criminal charges on both Mayweather and Khaled. Will this be a trend in the coming years? And now that Bitcoin’s price has mellowed, and regulations are now in place, could this bring maturity to the market?

Mark Ayesa

Mark manages our editorial team, social handles and is always on the lookout for great writing talent to contribute to our site. On a day-to-day basis he ensures the content on CryptoCurrency365.com is of the highest quality and also carries out extensive research on any current hot topics of the crypocurrency world for our writers.

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