Celebs and ICOs: The Makings of a Dangerous Duo

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Centra Tech had raised $32 million during its ICO. Centra Card was advertised as a debit card reportedly backed by Visa and Mastercard, which allowed users to convert crypto into fiat currencies.

Mayweather wasn't the only high-profile celebrity to be tainted by association to the fraudulent project.

American music producer DJ Khaled had also endorsed the project on social media, touting the Centra debit card on Instagram.

The SEC formally charged both Mayweather and Khaled for unlawfully advertising the fraudulent ICO. Mayweather copped a heavy judgement from the regulator for not disclosing promotional payments from three ICO issuers, including $100,000 from Centra Tech.

What made things even more perplexing was that American actor Steven Seagal was revealed as the brand ambassador for the project's ICO. The project claimed to be a peer-to-peer payment system in the mould of Bitcoin, running on the Ethereum blockchain.

Just two months after its launch, the founders - along with Seagal - announced their departure from the project after the completion of its ICO in March.

American rapper The Game also got involved in the world of ICOs in August 2017, posting a video on Twitter in which he promoted a blockchain-based platform focused on the marijuana industry.

According to reports, the founders of the project did not register the ICO with the relevant regulators, which led to legal battles with initial investors.

The SEC's decision to charge both Mayweather and Khaled has made the consequences of unlawful promotions of ICOs clear for all to see.

"These cases highlight the importance of full disclosure to investors. With no disclosure about the payments, Mayweather and Khaled's ICO promotions may have appeared to be unbiased, rather than paid endorsements."

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