THE SEC has shut down and charged the founders of Centra ICO with “orchestrating a fraudulent initial coin offering,” the regulator said Monday night.
Sohrab Sharma and Robert Farkas that are the co-founders of Centra Tech had been charged by the SEC with fraud after raising a staggering $32 million by selling “unregistered securities.”
The ICO claimed that the funds would be used in developing financial products backed by Two major payment networks – Visa and Mastercard.
The SEC stated that Centra had no relationship with either payment card network and the two co-founders had created false marketing material such as fake team members.
The SEC had released a press release on the matter, it said: “As we allege, the defendants relied heavily on celebrity endorsements and social media to market their scheme. Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors.”
The SEC allege that Centra Tech had paid celebrities such as Boxing champion Floyd Mayweather who endorsed them on Instagram last September.