ICO News

Executives Behind Centra, the ICO Backed by Floyd Mayweather Charged of Fraud


All is not well with Centra, the initial coin offering endorsed by boxing star Floyd Mayweather and rapper DJ Khaled.

The Securities and Exchange Commission has now leveled charges against executives behind the project for flouting various regulations. The crowdfunding project is said to have raised $32 million from thousands according to a statement from the SEC. None of the celebrities is mentioned in the charges.


Sohrab Sharma and Robert Farkas are accused of violating registration and anti-fraud securities laws. The two are effectively being charged for selling unregistered investments through the Centra ICO.

They are further charged with claiming that the funds raised in the ICO “would help build a suite of financial products,” including debit cards when the company had no legitimate relationship with providers.

Centra had said in its promotional material that this would help customers easily convert crypto to fiat. It had been claimed that the card would be backed by Visa and MasterCard.

The two are also claimed to have created profiles on non-existent executives.

Farkas was allegedly attempting to fly out of the US before the arrest was made.

Comprehensive List of Crypto Products

Centra was offering a comprehensive list of cryptocurrency products including a wallets service, an exchange, market place, digital tokens and an open source custom blockchain as per its website.


According to the SEC statement, Centra “sold investors on the promise of new digital technologies by using a sophisticated marketing campaign,” said Steven Peikin, SEC’s co-director for Enforcement.

“Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors,” he added.

The SEC is seeking to have the two co-founders refund the funds and barred from serving in a public company. If the prayers of the SEC are granted, the two cofounders will also be barred from participating in digital and securities offerings in the future.

The announcement saw the value of CTR tokens drop by almost 70%. A unit is now trading for 0.05 having lost nearly 50% over the last 24 hours according to CoinMarketCap. Market capitalisation has now dropped below $4 million.

The ICO scene has been very active in the past year. More than $5 billion has been raised through the new crowd funding model in which investors support blockchain based start ups. Unlike IPOs, ICOs are not necessarily based on existing business models.

Scammers Taking Advantage

Because of lack of regulations the sector is also replete with scams masquerading as legitimate projects. In recent months governments have been trying to get a hold of the industry though interventions have tended to be heavy handed.

Some countries like France are however coming up with crypto-friendly legal frameworks to attract capital for start ups. Others include Malta and Switzerland.

Binance is reportedly planning to move to Malta after being recently hounded out of Japan while Bitfinex is planning to set up in Zug, Switzerland.

ICO’s have shown the remarkable speed with which funds can be raised. The race to launch ICOs reached fever pitch in 2017 as people tried to replicate the success of Bitcoin.

Leave a Reply

Notify of

Risk Warning: Investing in digital currencies, stocks, shares and other securities, commodities, currencies and other derivative investment products (e.g. contracts for difference (“CFDs”) is speculative and carries a high level of risk. Each investment is unique and involves unique risks.

CFDs and other derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Any trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Your capital is at risk.

When trading in stocks your capital is at risk.

Past performance is not an indication of future results. Trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Prices may go down as well as up, prices can fluctuate widely, you may be exposed to currency exchange rate fluctuations and you may lose all of or more than the amount you invest. Investing is not suitable for everyone; ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Some links are affiliate links. For more information please read our full risk warning and disclaimer.