Floyd Mayweather and DJ Khaled have been hit with cryptocurrency fraud charges by the Securities and Exchange Commission for promoting cryptocurrency coin offerings without disclosing that they’ve been compensated already.
As per a press release by the SEC, Khaled failed to mention he received a $500,000 payment from Centra Tech Inc., which he dubbed a “game changer” on social media.
DJ Khaled and Mayweather both settled and agreed to pay for penalties, and agree not to promote any securities, digital, or anything similar for the next two to three years.
Enforcement Division Co-Director Steven Peikin said that investors should be cautious of celebrity endorsements. “Investors should be skeptical of investment advice posted to social media platforms and should not make decisions based on celebrity endorsements,” said Peikin. “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.”