Floyd Mayweather and DJ Khaled are paying up after promoting initial coin offerings of new cryptocurrencies without revealing to investors that they were being paid for their trouble.
According to CNBC, the Securities and Exchange Commission made Khaled and Mayweather the first people to be charged with ICO violations. Both the record producer and the semi-retired boxer touted the benefits of Centra Tech Inc.'s cryptocurrency ahead of its first public offering on their social media without sharing that they were paid by the company to do so.
"Get yours before they sell out, I got mine," Mayweather wrote of the coins on his Twitter.
Khaled called the cryptocurrency a "game changer" ahead of its offering. Khaled and Mayweather were paid $50,000 and $100,000 respectively. In addition to that, Mayweather drew the ire of the SEC for failing to disclose another $200,000 in promotional payments from 2 more ICOs.
Khaled and Mayweather agreed to a settlement where they neither admitted nor denied the findings of the SEC. As part of the settlement, Mayweather will pay $300,000 in disgorgement, a $300,000 penalty and $14,775 in interest. Khaled will have to pay $50,000 in disgorgement, a $100,000 penalty and $2,725 in interest.
Centra is in further trouble that goes beyond their spokespeople being fined. The SEC and the Justice Department have filed civil and criminal charges against the company, alleging that the ICO promoted by the stars was entirely fraudulent. The founders of Centra are currently facing charges for "making false claims about their product and about relationships they had with credible financial institutions" and going so far as to create "a fictitious Centra Tech CEO," according to a DOJ press release.
