Oh, the irony…
Floyd Mayweather, arguably the most well-known face in boxing, along with producer and social media extraordinaire DJ Khaled, has essentially been sucker punched by the U.S. Securities and Exchange Commision (SEC) in a crypto- and ICO-related case.
Floyd Mayweather, DJ Khaled Lose Thousands In Crypto Case
On Thursday morning, after a cloud of legal action loomed over for months, DJ Khaled and Floyd Mayweather, two of the world’s biggest stars, were revealed to have been name-dropped in a recent crypto-related SEC ruling.
The case in question, which involved the two influencers and a crypto-backed debit card project Centra, was filed on Thursday afternoon to the likely dismay of Mayweather, Khaled, and their counsel. As put by media outlet Gizmodo on Twitter, the “SEC has informed DJ Khaled that he has played himself.”
For those who aren’t in the loop, in 2017, amid the now-infamous crypto boom, Mayweather and Khaled began to foray into the cryptosphere, posting seeming promotional material for Centra’s ICO without disclosing that it was pay-to-play.
— Floyd Mayweather (@FloydMayweather) September 18, 2017
Interestingly, while Centra (CTR) has since been deemed a scam, this fact wasn’t the focus of the SEC’s ruling. Instead, the financial regulator said that the two influencers were in the wrong due to their failure to disclose their business relationship with the fraudulent crypto startup.
Per data gathered by the SEC, Mayweather was paid $100,000 for a series of Centra posts and $200,000 for other ICOs, while Khaled saw a $50,000 check fly his way from Centra alone.
The two players have now been mandated to pay hefty sums. Mayweather will give up $300,000 in disgorgement, another 300 grand as a penalty, and a bit extra for interest. Khaled, in comparison to Mayweather, got off scot-free, as the American music entrepreneur has been required to pay ‘only’ $100,000 in penalties, and $50,000 in disgorgement. Both Mayweather and Khaled agreed to enter a time-limited blackout for advertising securities, at three and two years respectively.
Stephen Palley, a lawyer by day, yet crypto fanatic by night, took to Twitter to lend his insight on this strange happenstance, joking:
Whelp, who could see this coming?
+ Floyd Mayweather: https://t.co/kgqZiCbrnO
— Palley (@stephendpalley) November 29, 2018
And across the crypto community at large, it seemed that the sentiment was much of the same, with many commentators expressing their opinion about how stupid this whole case was.
Dreary Times For ICO Projects
Yet, this intriguing case comes amid a dreary time for ICO’s regulatory outlook. Just recently, the SEC charged AirFox and ParagonCoin, two lesser-known projects, for facilitating the sale of digital securities without proper licenses or a regulatory go-ahead.
And, with another one of the SEC’s anti-crypto cases in mind, where the governmental agency fined the founder of EtherDelta, it has become apparent that the SEC isn’t too fond of the ICO capital raising model.
More specifically, crypto savants have drawn attention to the growing thought process that ICOs are a dying breed, solely due to the SEC’s apparent classification of these products as securities. Keeping this dismal sentiment this in mind, many, mostly ‘bagholders’, are afraid that a majority of tokens won’t survive 2018’s (and possibly 2019’s) crypto winter.
But for now, it isn’t too clear how the SEC will act in the near future. On financial media sources CNBC, SEC Commissioner Clayton, in a testament to this apparent secrecy, was hesitant to comment on ICOs’ prospects, even failing to mention the legal status of XRP, a much-contested subject in crypto’s recent history.