Floyd Mayweather, DJ Khaled Charged for Not Disclosing Payments Related to Cryptocurrency
Floyd Mayweather and music producer DJ Khaled have been charged by the Securities and Exchange Commission for pumping up initial coin offerings (ICO) in cryptocurrency from Centra Tech Inc. without telling investors they were receiving a promotional fee, according to Liz Moyer of CNBC.
A settlement was announced Thursday for these cases, which the SEC said are the first to charge touting violations regarding ICOs. The SEC said the investigation is still going on.
ICOs are when a company sells cryptocurrency to the initial investors in exchange for either other cryptocurrencies or money. Last year, the SEC said coins sold in ICOs could be securities and those who offered them need to comply with federal securities laws, according to CNBC. The SEC charged Centra's founders with carrying out a fraudulent ICO earlier this year and the Justice Department filed criminal charges in relation to the case.
The promotional payment Mayweather didn't disclose was for $100,000 while DJ Khaled's was for $50,000. Mayweather also failed to disclose $200,000 he was paid to promote two other ICOs.
Mayweather will pay $300,000 in disgorgement, a $300,000 penalty and $14,775 in interest while DJ Khaled will pay $50,000 in disgorgement, a $100,000 penalty and $2,725 in interest. Additionally, Mayweather agreed to not promote securities for three years and cooperate with the investigation while DJ Khaled agreed to not promote securities for two years.
