The music producer and pro boxer Floyd Mayweather were both charged by the Securities and Exchange Commission with improperly promoting initial coin offerings (ICOs) for cryptocurrencies without revealing to investors that they were getting paid for the privilege.
According to CNBC, a settlement announced Thursday revealed these charges, claiming that Mayweather failed to disclose a $100,000 promotional payment from crypto firm Centra Tech Inc., and Khaled did the same with his $50,000 fee. While the two settled the charges out of court, the SEC claims an ongoing investigation of the two.
As cryptocurrencies continue to gain traction, investors are throwing billions of dollars into ICOs, often regardless of the strength of the currency; the SEC is still struggling to keep up with how to regulate and legislate these new forms of currency. The cases against Khaled and Mayweather are among the first to apply touting violations to ICOs.
Both parties promoted Centra Tech on their social media accounts leading up to the ICO; Mayweather told his Twitter followers that it “starts in a few hours. Get yours before they sell out, I got mine.” The SEC also claims Khaled called the ICO a “game changer.”
Centra wasn’t the only ICO Mayweather touted, either; he was paid $200,000 to promote two others, without disclosing any of these payments. He boasted on Twitter that “You can call me Floyd Crypto Mayweather from now on.”
As a result of the settlement, Mayweather will pay more than $600,000 in disgorgement and penalties, while Khaled will pay over $150,000. Both are banned from promoting securities – Mayweather for three years, Khaled for two. I wonder if there’s room for another verse on Nicki Minaj’s diss track “Barbie Dreams” for all this?