Undefeated boxer Floyd Mayweather has endorsed a wide variety of products during his career. He always seems to be endorsing something. His endorsement of a product has got him into some hot water with the Securities and Exchange Commission. Mayweather broke SEC rules when he did not reveal that he had been paid a sum of $300,000 to promote a variety of cryptocurrency companies. Music producer DJ Khaled was also busted by the SEC for the same crime. Both of the stars have been heavily promoting the various initial coin offerings of these cryptocurrency companies on their social media accounts.
Mayweather and Khaled reached a settlement with the SEC where they agreed to give all the money they were paid to the SEC. They will also need to pay penalties and interest. They also agreed to not promote any other cryptocurrencies for a period of three years. This whole situation stems from the fact that the SEC considers initial coin offerings the same as selling securities. Therefore, the securities laws of the federal government apply to them. One of the companies that paid Mayweather to promote their cryptocurrency on social media is called Centra. This company has been charged by the SEC for having a fraudulent initial coin offering.
The SEC is warning people to be very careful about the initial coin offerings that they take part in. This is because many of them can be fraudulent. Many of the shady cryptocurrency companies will hire celebrities to endorse their initial coin offerings on social media. The SEC says that people need to understand these celebrities are not financial experts giving their unbiased opinions. They are being paid to get their social media followers to use a specific product. This is why the SEC is demanding that celebrities reveal whenever they have received compensation to promote any initial coin offerings in the future.
The investigation of Centra by the SEC is still in progress. There have been no arrests made of any Centra employees as of yet. The SEC said that it will start cracking down on any social media influencer who attempts to promote any initial coin offering without being completely transparent with their followers about any payment they receive. Mayweather and DJ Khaled have not commented publicly on this issue since they reached their settlement with the SEC. Mayweather regularly uses his social media accounts to promote various products he is paid to endorse.