— Floyd Mayweather (@FloydMayweather) September 18, 2017
The Securities and Exchange Commission on Monday charged two co-founders of a purported financial services startup with orchestrating a fraudulent initial coin offering that was touted by the boxer Floyd Mayweather and raised more than $32 million from thousands of investors in 2017.
The SEC’s complaint, filed in federal court in the Southern District of New York, alleges that Sohrab “Sam” Sharma, 26, and Robert Farkas, 31, co-founders of Centra Tech Inc., masterminded a fraudulent ICO in which Centra offered and sold unregistered investments through a “CTR Token.”
Sharma and Farkas allegedly claimed that funds raised in the ICO would help build a suite of financial products, the complaint states.
The two claimed, for instance, to offer a physical “crypto debit card” that was connected to a virtual “smart wallet” via an Apple or Android smartphone application, and that the card was backed by Visa and MasterCard and users could instantly convert hard-to-spend cryptocurrencies into U.S. dollars or other legal tender.
In reality, the SEC says, Centra had no relationships with Visa or MasterCard.
The SEC also alleges that to promote the ICO, Sharma and Farkas created fictional executives with impressive biographies, posted false or misleading marketing materials to Centra’s website, and paid celebrities to tout the ICO on social media.
While the complaint does not name the celebrities, boxer Floyd Mayweather tweeted last September that “Centra’s (CTR) ICO starts in a few hours. Get yours before they sell out, I got mine.”