The Securities and Exchange Commission charged former welterweight champion Floyd Mayweather with cryptocurrency fraud on Thursday, alleging that Mayweather failed to disclose he was paid for promoting investments in initial cryptocurrency coin offerings.
According to the SEC, Mayweather did not report that he had received $300,000 from a total of three ICO issuers that paid him to promote the offerings online. One of those companies was Centra Tech, a company that has been separately charged by the SEC for a fraudulent ICO.
Mayweather used his social media accounts to encourage followers to join Centra's ICO with the promise of striking it rich without disclosing that he was being paid by the company to endorse their offering. The SEC mandates disclosure for the purpose of ensuring that paid endorsers are not misleading an audience into believing they're offering an unbiased recommendation.
Mayweather pumped Centra's ICO on his Twitter account, tweeting that it "starts in a few hours. Get yours before they sell out, I got mine."
The boxer has settled with the SEC and, as part of his punishment, will be banned from promoting any securities for three years. He is cooperating with the SEC in their ongoing investigation and will pay them the $300,000 he received, plus an additional $300,000 penalty and $14,775 in interest.
Music producer DJ Khaled was also paid to promote Centra and was charged by the SEC on Thursday as well. He will have to fork over the $50,000 payment he received, plus a $100,000 penalty and $2,725 in interest.
Mayweather and Khaled are the first two individuals to be charged by the SEC for promoting ICOs.