Dj Khaled and Floyd Mayweather have been charged with illegally promoting cryptocurrencies.
The hip-hop producer and boxer allegedly promoted investments in Initial Coin Offerings (ICOs) without disclosing payments they’d received for doing so.
A press release from the U.S. Securities and Exchange Commission (SEC) claims Khaled failed to disclose a $50,000 payment from a company called Centra Tech, after which he touted their ICO as a “game changer” on his social media accounts.
Mayweather is accused of taking $100,000 from Centra Tech and $200,000 from two other companies to promote cryptocurrencies to potential investors.
SEC officials filed a civil action against Centra Tech’s founders, alleging their ICO was fraudulent and officials from the U.S. Attorney’s Office for the Southern District of New York have also filed parallel criminal charges.
The I’m the One hitmaker and the sportsman’s alleged actions came after SEC officials warned last year that ICOs, the point when a cryptocurrency is offered for sale to the public, had to comply with U.S. securities laws.
According to the SEC, both have agreed to pay disgorgement penalties and interest without admitting or denying the findings of the investigation. Mayweather agreed to pay $600,000 plus $14,775 in interest, while Khaled has agreed to pay $150,000 and $2,725 in interest.
Khaled has been prohibited from promoting cryptocurrencies for two years, while the former welterweight boxing champion has been slapped with a three-year ban.
The boxer has agreed to cooperate with the investigation – which is still ongoing.