SEC fines boxer Floyd Mayweather $600,000

In August 2017, boxer Floyd Mayweather promoted an initial coin offering from cryptocurrency company Hubii Network on Twitter. Less than a month later, he was promoting another ICO on his Twitter feed, this time from Centra Tech.

The Securities and Exchange Commission fined Mayweather $600,000 for failing to disclose that he was paid by three cryptocurrency companies to promote their ICOs.

In a press release, the SEC said Mayweather received $100,000 from Centra Tech and $200,000 from two other companies. By keeping this information secret, Mayweather violated federal securities laws, which require disclosure of information in such cases.

The SEC also fined music producer DJ Khaled more than $150,000 for similar violations.

Without full information about the fees received, the SEC said, Mayweather and Khaled's promotion of the ICO could have been perceived by investors as investment advice rather than paid for. advertising.

Investors should be skeptical of investment advice on social media and should not make decisions based on the opinions of celebrities. Social media promoters often pay promoters rather than investment professionals, and the securities they promote, whether issued using traditional or cryptocurrency assets, may be fraudulent.

The SEC claims that one of the companies that paid Mayweather for advertising was indeed fraudulent. 

In April, Centra co-founders Sam Sharma and Robert Farkas were arrested on charges that they misled investors and defrauded them of more than $32 million. The day after the arrests, the SEC filed a lawsuit against them, citing numerous cases of fraud.