A professional boxer and a music producer agreed to settle SEC charges for neglecting to disclose payments received for promoting investments in initial coin offerings ("ICOs").
According to the SEC Orders (see here and here), Floyd Mayweather Jr. failed to disclose promotional payments from three ICO issuers, including $100,000 from Centra Tech Inc. ("Centra Tech") and $100,000 each from two other ICO issuers. Khaled Khaled failed to disclose a $50,000 payment from Centra Tech (which he noted on his social media accounts).
Mr. Mayweather will pay $300,000 in disgorgement, a $300,000 penalty, and $14,775 in prejudgment interest. Mr. Khaled will pay $50,000 in disgorgement, a $100,000 penalty, and $2,725 in prejudgment interest. Additionally, Mr. Mayweather agreed not to promote any securities for three years, and Mr. Khaled consented to a similar ban for two years.
Commentary / Kyle DeYoung
This is the SEC's first crypto touting case but it won't be its last. With the increased prevalence of ICO's and the SEC's position that they qualify as securities, these kinds of cases will likely become more common.
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