The Securities and Exchange Commission (SEC) reached a settlement with Floyd Mayweather and DJ Khaled. According to the Associated Press, the pair were fined for neglecting the disclosure of money they accepted while encouraging followers to invest in cryptocurrency.
According to SEC’s enforcement division co-director, Stephanie Avakian, Khaled and Mayweather’s promotional initial coin offerings (ICO) “may have appeared to be unbiased, rather than paid endorsements,” since they failed to make apparent the money they received. Khaled reportedly made $50,000 while Mayweather netted $100,000 from one of the outlets named Centra Tech, as well as $200,000 from other entities.
According to CNN, both Khaled and Mayweather amplified Centra’s ICO on their respective platforms, but the SEC claims these types of ICOs are to be considered with a caution.
Steven Peikin, the SEC’s enforcement division co-director, explained that “Social media influencers are often paid promoters, not investment professionals, and the securities they’re touting, regardless of whether they are issued using traditional certificates or on the blockchain, could be frauds.”
Mayweather will pay $600,000 while Khaled is responsible for a $150,000 fine.