World-renowned boxing champion Floyd Mayweather and famed record producer DJ Khaled are dealing with the fallout of a class action lawsuit due to their involvement with Centra Tech’s CTR token, a crypto asset the suit claims is a scam that cost investors millions of dollars.
Their Role
Mayweather and Khaled both promoted the coin and other forms of cryptocurrency, via social media. Since last year, both of them have enthusiastically posted about the Centra ICO on Twitter with the caption “You can call me Floyd ‘crypto’ Mayweather from now on.” In one tweet, Khaled referred to the Centra card and wallet app.
Spending bitcoins ethereum and other types of cryptocurrency in Beverly Hill https://t.co/q9VZ3MzpK8 pic.twitter.com/BYyOFUnm8W
— Floyd Mayweather (@FloydMayweather) September 15, 2017
Centra’s (CTR) ICO starts in a few hours. Get yours before they sell out, I got mine https://t.co/nSiCaZ274l pic.twitter.com/dB6wV0EROJ
— 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
The class-action suit, filed last year, culminated in the Securities and Exchange Commission (SEC) charging Centra’s founders with “orchestrating a fraudulent initial coin offering (ICO).” The suit claims $32 million was stolen from backers of Centra’s fraudulent token in 2017, and hinges on the accusation that CTR tokens were bought and sold as unregistered securities. The two founders were arrested in April 2018.
Centra claimed during the ICO, its customers could use their “Centra card” product to spend crypto using their conventional Visa or Mastercard debit cards, according to court documents. CTR was an ERC-20 token built on the Ethereum blockchain. No actual business relationship between Centra and the card companies appears to have existed, and investors contacted the company founders to request a refund based on that misrepresentation.
Centra Founders Lied About Paying for Celebrity Endorsements
Mayweather and Khaled are being drawn into the suit for their roles as celebrity endorsers of Centra’s product. Centra’s founders Robert Farkas, Raymond Trapani, and Sohrab “Sam” Sharma, lied about paying both celebrities to endorse and promote their product, according to court documents made public by the SEC, which read:
“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.’”
The suit also alleges that Farkas and Trapani knowingly undertook part in manipulative trading to boost CTR’s price in the lead up to their ICO, a common practice in scams used to generate interest in the product.
The suit indemnifies the three main defendants as Farkas, Trapani, and Sharma as well as their “respective agents, servants, employees, attorneys and other persons in active concert or participation with each of them,” which appears to include paid celebrity endorsers.
The post Floyd Mayweather and DJ Khaled Sued for Involvement in Centra ICO Scam appeared first on CryptoSlate.
Source: CryptoSlate
Original Post: Floyd Mayweather and DJ Khaled Sued for Involvement in Centra ICO Scam
