Floyd Mayweather and DJ Khaled Named in Crypto Class Action Suit Against Centra Tech
Both Floyd Mayweather and DJ Khaled Sued for Being Involved in Centra Tech ICO
As cryptocurrencies experienced an exponential increase in the last year, the number of Initial Coin Offerings (ICOs) has also increased. There were some projects that in order to gain more visibility paid recognized figures in the sport and music industry to promote their products and ICO. However, some of these ICOs were scams.
According to TMZ, Floyd Mayweather and DJ Khaled, are dealing with a class action lawsuit after being involved with Centra Tech’s CTR token. As per the suit, this crypto asset is considered a scam that cost several millions of dollars to investors.
Social media posts made by these two influential celebrities encourage people to buy the coin.
— Floyd Mayweather (@FloydMayweather) September 15, 2017
— Floyd Mayweather (@FloydMayweather) September 18, 2017
I just received my titanium centra debit card. The Centra Card & Centra Wallet app is the… https://t.co/iIbQwQCwD1
— DJ KHALED (@djkhaled) September 27, 2017
It is important to understand that the Securities and Exchange Commission (SEC) says that the company was illegally operating trying to mislead investors. Centra Tech was able to raise $32 million dollars during its ICO in 2017. These funds have also been gathered due to the fact that these celebrities endorsed the company.
Back in April, the founders of the scam were arrested and faced several charges related to securities and wire fraud, among others. Additionally, the CTR tokens were bought and sold as unregistered securities.
Due to this situation, the coin dropped from $1 dollar down to $0.02 dollars. Now, buyers are going after the company founders and the celebrities that endorsed the coin.
During the ICO the company claimed that the Centra card product allowed users to spend their virtual currencies using Visa or MasterCard debit card. However, it seems that there is no relationship between CTR and these two important financial companies.
Centra’s founders are Robert Farkas, Raymond Trapani and Sohrab ‘Sam’ Sharma.
The document released by the SEC reads as follows:
“When he was contacted by a Fortune magazine reporter about the celebrity promotions of Centra, Trapani claimed that two well-known celebrities had each been hired as a ‘managing partner’ of Centra. When the reporter asked whether several posts to social media by one celebrity were part of a sponsorship or paid advertisement, Trapani responded, falsely: ‘No [he] is an official brand ambassador and managing partner of Centra Tech now.”
Moreover, the suit says that Farkas and Trapani manipulated trading and boost CTR’s price. This is something that other less serious companies do to attract new investors.
As of now, there doesn't seem to be any new releases from the SEC or DOJ on any lawsuits towards the two. It's a little interesting that TMZ hasn't updated their article to include a source on the subject. If we find out more, we will update this story with new information.