INSUBCONTINENT EXCLUSIVE:
Image copyrightAFP/GettyImage caption
Floyd Mayweather Jr has been hit outside the boxing ring by the SEC
Boxer Floyd Mayweather Jr and music producer DJ Khaled will pay thousands of dollars to settle charges that they violated US financial
laws.The Securities and Exchange Commission announced the settlement on Thursday.The US financial regulator said the men failed to disclose
payments they received to promote certain cryptocurrency investments.The men neither admitted nor denied the claims, but agreed to pay
combined penalties totalling more than $750,000.The two cases are the first the SEC has brought over touting violations involving initial
coin offerings or ICOs, a relatively new investment vehicle associated with crypto-currencies.An ICO allows people to invest in a company by
buying "tokens" or "coins" that it issues
Despite the new language, the SEC has warned investors that it views many of the offerings as investments governed by existing securities
laws.Those rules require disclosure of payments in exchange for publicity.In this case, the SEC said Mr Mayweather received $300,000 to
promote three separate offerings, including one by Centra Tech, a Miami company that the SEC accused of fraud in April.Mr Mayweather's
promotions included a message to his Twitter followers that Centra's ICO "starts in a few hours
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DJ Khaled will pay thousands of dollars to settle SEC charges
A post on Mayweather's Instagram
account predicted he would make a large amount of money on another ICO and a post to Twitter said: "You can call me Floyd Crypto Mayweather
from now on."The two men touted the offerings to their millions of social media followers without disclosing the payments, according to the
settlement."This is a game changer here
Get your CTR tokens now!" Mr Khaled wrote in one post cited by the SEC.The SEC said Mr Khaled agreed to repay the $50,000 he received for
the endorsement, as well as a $100,000 fine and interest.Mr Mayweather will repay the $300,000 he received, as well as a $300,000 fine and
interest.SEC Enforcement Division Co-Director Steven Peikin said the cases were a reminder that investors should "be sceptical of investment
advice posted to social media platforms, and should not make decisions based on celebrity endorsements"."Social media influencers are often
paid promoters, not investment professionals, and the securities they're touting, regardless of whether they are issued using traditional
certificates or on the blockchain, could be frauds," he said.
