The Securities and Exchange Commission (SEC) has charged music producer DJ Khaled and boxer Floyd Mayweather Jr. with promoting investments in initial cryptocurrency coin offerings without revealing that they had been paid.
The stock market regulatory authority on Thursday said that cryptocurrency coins sold in initial coin offerings (ICO) may be considered securities and subject to federal securities laws, reports CNN.
Both Khaled and Mayweather settled with the SEC and agreed not to promote any securities, even digital ones, for two years and three years, respectively, it said.
They also agreed to give back the money they had received to the SEC and pay penalties with interest.
Mayweather failed to disclose that he had received $300,000 from three different ICO issuers, including $100,000 from Centra Tech.
Khaled failed to disclose a payment of $50,000 from the same company.
Centra has separately been charged by the SEC, which alleged that its ICO was fraudulent.
Both Mayweather and Khaled promoted Centra’s ICO on their social media accounts. Khaled called it a “game changer” while Mayweather encouraged his followers to get in on the ICO.
This is the first time the SEC has brought charges against individuals for promoting ICOs and the investigation was ongoing.
