Latest in Entertainment

Image credit: Chris Pizzello/Invision/AP

DJ Khaled and Floyd Mayweather fined for illegally promoting ICOs

A failure to disclose sponsored posts will cost the two more than $750k.
216 Shares
Share
Tweet
Share
Save

Sponsored Links

Chris Pizzello/Invision/AP

Last year the SEC issued a warning to celebrities promoting Bitcoin and other cryptocurrency offerings, saying they "must disclose the nature, scope, and amount of compensation received in exchange for the promotion." That warning carried a bit more bite than other advisories about sponsored posts on social media, owing to the involvement of federal securities laws. A failure to heed that warning has cost two high-profile promoters of one particularly scammy initial coin offering (ICO): DJ Khaled and boxer Floyd Mayweather.

Both took money to promote Centra Tech, an ICO that eventually led to fraud charges for several of its masterminds. The SEC found that Mayweather took $100,000 to promote the Centra token, as well as $200,000 to promote two other ICOs, in posts like an Instagram message where he told his millions of followers "You can call me Floyd Crypto Mayweather from now on." DJ Khaled was paid $50,000 to promote Centra Tech -- facts neither mentioned in their social media posts.

While they avoided admitting any wrongdoing, both will have to give up the money they were paid, along with an additional $300,000 penalty for Mayweather to go with a $100,000 fine for DJ Khaled (plus interest). While this year's drop in prices for Bitcoin and other tokens has taken a lot of the steam out of social media posts promising "get rich quick" ICOs, the SEC said its investigation is ongoing, and it's possible these won't be the last social media marketers targeted for their activity. Of course it could be worse -- they could've been promoting another Fyre Festival.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.
Comment
Comments
Share
216 Shares
Share
Tweet
Share
Save

Popular on Engadget

Engadget's 2019 Back-to-School Guide

Engadget's 2019 Back-to-School Guide

View
Terminator T-800 and The Joker are coming to 'Mortal Kombat 11'

Terminator T-800 and The Joker are coming to 'Mortal Kombat 11'

View
Microsoft contractors listened to what people told their Xbox consoles

Microsoft contractors listened to what people told their Xbox consoles

View
Tesla delays price hike for self-driving upgrade

Tesla delays price hike for self-driving upgrade

View
New wristband could predict aggressive outbursts in people with autism

New wristband could predict aggressive outbursts in people with autism

View

From around the web

Page 1Page 1ear iconeye iconFill 23text filevr