Home Cryptocurrency Founders of cryptocurrency backed by Floyd Mayweather indicted for fraud

Founders of cryptocurrency backed by Floyd Mayweather indicted for fraud

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The three co-founders of a cryptocurrency promoted by boxer Floyd Mayweather and file producer DJ Khaled have been indicted by a federal grand jury, and stand accused of planning to defraud buyers out of thousands and thousands of .

The U.S. Lawyer’s Workplace for the Southern District of New York introduced Monday that Sohrab Sharma, Raymond Trapani and Robert Farkas, the co-founders of Centra Tech — which created the Centra token — are being charged with conspiracy and the fee of securities and wire fraud.

Learn: The SEC created a fake ICO website to show just how easy it is to scam investors

The Miami-based firm raised $32 million in an preliminary coin providing final 12 months, and authorities seized greater than 91,000 ether cash, price greater than $60 million, the U.S. Lawyer’s workplace stated.

“The defendants conspired to capitalize on investor curiosity within the burgeoning cryptocurrency market,” U.S. Lawyer Robert Khuzami said in a statement. “They allegedly made false claims about their product and about relationships that they had with credible monetary establishments, even making a fictitious Centra Tech CEO. Whether or not conventional or cutting-edge, funding automobiles can’t legally be peddled with falsehoods and lies.”

See: Nearly half of all 2017 ICOs have failed

Final month, the Securities and Alternate Commissions charged the three co-founders with fraud. In allegations echoing these introduced by the SEC, the U.S. Lawyer’s workplace stated the co-founders made up fictional executives, lied about relationships with Visa Inc.

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  and MasterCard Inc.

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  and withheld vital data from buyers in an effort to mislead them.

Centra Tech relied on endorsements from celebrities akin to Mayweather and Khaled on the time of its ICO. Neither had been named within the indictment. Mayweather has promoted a number of cryptocurrencies, and earlier this 12 months, the SEC issued an alert warning buyers to not make funding selections based mostly solely on movie star endorsements.

Additionally: The ‘Wolf of Wall Street’ says ICOs are ‘the biggest scam ever’

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