SEC jabs May­weather for crypto pro­mo­tions

The Washington Post Sunday - - WASHINGTONPOST.COM/SPORTS - BY MATT BONESTEEL [email protected]­post.com Ex­cerpted from wash­ing­ton­post.com/ear­lylead

In Au­gust 2017, boxer Floyd May­weather took to Twit­ter to pro­mote an Ini­tial Coin Of­fer­ing from a cryp­tocur­rency com­pany called Hu­bii Net­work. “You can call me Floyd Crypto May­weather from now on,” he wrote.

Less than a month later, May­weather used Twit­ter to pro­mote an­other ICO, this one from Cen­tra Tech. “Get yours be­fore they sell out, I got mine,” he wrote.

But ac­cord­ing to the Se­cu­ri­ties and Ex­change Com­mis­sion, May­weather wasn’t let­ting peo­ple in on his crypto in­sights out of the good­ness of his heart. On Thurs­day, the SEC an­nounced that May­weather had paid a fine of more than $600,000 for fail­ing to dis­close that he had been paid by three cryp­tocur­rency com­pa­nies to pro­mote their ICOs.

The SEC said May­weather re­ceived $100,000 from Cen­tra Tech and $200,000 from two other com­pa­nies to pro­mote their ICOs. By keep­ing th­ese pay­ments se­cret, May­weather vi­o­lated fed­eral se­cu­ri­ties laws that man­date dis­clo­sure in such in­stances.

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

“Th­ese cases high­light the im­por­tance of full dis­clo­sure to in­vestors,” Stephanie Avakian, co-di­rec­tor of the SEC’s en­force­ment di­vi­sion, said in a news re­lease. “With no dis­clo­sure about the pay­ments, May­weather and Khaled’s ICO pro­mo­tions may have appeared to be un­bi­ased, rather than paid en­dorse­ments.”

In April, Cen­tra Tech co­founders Sam Sharma and Robert Farkas were ar­rested on charges that they mis­led in­vestors about their ICO, which raised more than $32 mil­lion from in­vestors. The day af­ter their ar­rests, the SEC filed a law­suit against them, al­leg­ing nu­mer­ous in­stances of fraud.

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