Federal regulators said the boxing legend Floyd Mayweeder and music producer DJ Khaled paid a total of $ 750,000 ($ 1,090,000) to settle costs they failed to publish the payments they received to promote investment in digital securities .
The Securities and Exchange Commission said that the cases were the first to include charges of violating the rules for financing investments in so-called coin-launch or ICO bidding. The MCC provides startup to use technology behind the battle, known as blockchain, to fund projects.
The SEC said Mayweather had failed to disclose promotional payments from the three ITO publishers, including $ 100,000 from Center Tech. Khaled reportedly did not disclose $ 50,000 for a payment from the Center, which he regarded as social media accounts as a "game changer".
Mayver and Khaled did not acknowledge, nor denied the allegations that they agreed with the settlements.
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Mayweather's promotions include a message to his followers on Twitter who warned them that the ICO Center "started in a few hours. Take it before you sell it, I had it." The boxer has nearly 8 million followers on Twitter.
"From now on you can call me Floyd Crypto Mayweather," he said in another tweet, according to the SEC. Regulators claim Mayweather declined to disclose that $ 200,000 was paid to promote the other two MCOs, in addition to the Center.
Without announcing payments, McWater and Khaled's MCO promotions may seem to be impartial rather than paid support, "said Stephanie Awakian, co-director of the SEC's executive department, in a statement.
According to settlements, Mayweather agreed to pay a $ 300,000 fine, cancel another $ 300,000 and pay $ 14,775 from interest. Khaled pays $ 100,000, giving up $ 50,000 and paying $ 2,725 for interest.
They also agreed not to promote any securities, digital or otherwise, three years in the Mayweather case and two years for Khaled.
Mayweather and Khaled were among a number of celebrities paid by the IWC to support them. ICOs have grown in popularity in recent years, raising billions of startups. With the ICO, the startup will issue a currency, sometimes called a token, which can be used to buy services from the company. For example, the offer to start online storage can issue tokens that can be used to purchase a repository.
The SEC urges investors to be skeptical of advice on investing on social media platforms and not to make decisions based on celebrities.
How to sell tokens is a central issue for the SEC. When a company's marketing implies that tokens can appreciate value, it can raise a red flag.
Kelly Svensson, a Mayweather publicist, said she probably would not comment on the solution. Khaled officials did not immediately respond to the search query.