The U.S. Securities and Exchange Commission is making an example out of boxer Floyd Mayweather and rapper DJ Khaled.
The SEC announced on Thursday it has settled charges against both celebrities for “unlawfully touting” initial coin offerings (ICOs). The main issue: Mayweather and Khaled did not disclose payments they received for promoting the ICOs on their social media accounts. Mayweather was paid by three different ICO issuers, including $100,000 from a company called Centra; Khaled also received $50,000 from Centra.
Hefty fines, and bans from pumping crypto
In total, Mayweather agreed to pay a fine of $614,775 ($300,000 in disgorgement, a $300,000 penalty, and $14,775 in prejudgment interest) and Khaled agreed to pay a fine of $152,725 ($50,000 in disgorgement, $100,000 penalty, and $2,725 in prejudgment interest). Mayweather may not promote any securities (“digital or otherwise”) for three years, and Khaled may not promote any for two years.
Mayweather also agreed to keep “cooperating with the investigation,” which may mean the enforcement net against anyone connected to Centra will keep expanding.
As part of the settlement, neither celebrity admitted or denied wrongdoing.
Interestingly (and, many readers may find, humorously), the SEC includes specific social media posts in its press release. Khaled, the SEC writes, called the Centra ICO a “game changer.” Mayweather, on Twitter, told his followers that the Centra ICO, “starts in a few hours. Get yours before they sell out, I got mine.” He also tweeted, “You can call me Floyd Crypto Mayweather from now on.”