Founders of Centra Tech Inc, an Initial Coin Offering [ICO] endorsed by Floyd Mayweather were slapped with criminal charges by the U.S. for raising more than $25 million for planning a digital currency without registering the offering with the regulator.
Floyd Mayweather, the current undefeated boxing champion, was hired by the Founders to promote the upcoming offering on social media. Mayweather tweeted on the site saying that ‘Centra’s ICO would start soon and urged users to buy the coin before it is sold out’.
Sohrab “sam” Sharma, 26, and Robert Farkas, 31 who, in a criminal complaint in the Manhattan federal court, were accused of conspiracy to commit securities fraud and wire fraud. There are alleges that they had persuaded investors to invest in the currency by telling them that they had partnerships with Visa and Mastercard.
Steve Peikin, Director of the law enforcement agency, SEC issued a statement:
“The defendants have marketed their plans by relying heavily on celebrities and social media ,”
“Centra has sold investors by promising new digital technologies and by using a sophisticated marketing campaign to lie about their supposed partnerships with legitimate businesses. As the complaint follows, these and other claims were simply false.”
The Security and Exchange Commission which is the main regulator for cryptocurrency has warned users about buying in tokens sales. It has given various points which users should note before buying.
Jay Claton, the Chairman of SEC had earlier stated:
“I think if we don’t stop the fraudsters, there is a serious risk of a regulatory pendulum — the regulatory actions will be so severe that they will restrict the capacity of this new security”
SEC also stated that, despite the regulatory rule, many ICOs have continued to function without being registered.
A Twitterati says:
“Bad actors should be forced in jail. Shame of them”
Another Twitterati says:
“All crypto currencies are scams. Charge them all. Don’t let Bitcoin bully the smaller ones. Shut them ALL down”
The post The punch that cost a billion – Centra Tech founders arrested over fraud charges appeared first on AMBCrypto.
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