NEWS

Floyd Mayweather, DJ Khaled Settle Over ICO Hype

Mayweather Khaled SEC ICO Cryptocurrency

Cryptocurrency, Initial Coin Offerings (ICOs)–Even as the crypto markets reel from the last two weeks of price fall, with only a small reprieve occuring in the past day, the landscape of Initial Coin Offerings continues to make headlines butting heads with the regulatory body of the United States Securities and Exchange Commision (SEC).

While ICOs have come to constitute a large “Wild West” space within the already murky legal landscape of crypto, the development of the fundraising asset has drawn criticism and intrigue throughout 2018, in part due to the profit to be made by pumping coins ahead of launch. In the case of two high profile celebrities, their entanglement in the web of ICO obscurity has drawn the ire of the SEC.

According to Bloomberg, boxing legend Floyd Mayweather and music producer DJ Khaled were implicated in a sweeping action by the SEC targeting personalities who were accused of hyping coin projects without properly disclosing that they were being compensated for their opinion,

“Boxer Floyd Mayweather and music producer DJ Khaled were accused of failing to disclose payments they received for hyping initial coin offerings, making them the biggest names sanctioned in U.S. regulators’ months long crackdown on digital-token misconduct.”

Despite being known to the boxing world as “money” Mayweather, the undefeated and arguably greatest boxer of all time has agreed to pay more than $600,000 to settle his case with the SEC, according to an announcement by the agency published on Nov. 28. DJ Khaled made off slightly better in the situation, coming to an agreement to payout more than $150,000. While the landscape of cryptocurrency regulation has been spotty at best, the SEC has made it clear that profiting from Initial Coin Offering promotions, such as the ones Mayweather Khaled were accused of through their social media accounts, must be explicitly disclosed. Both Mayweather and Khaled failed to properly indicate that they were being compensated in exchange for promoting the ICO projects in question, which the SEC has perceived as manipulation that crosses even the slack regulations surrounding crypto.

Unfortunately, Mayweather and Khaled are not the only two celebrities and high profile names to profit from investor manipulation, with the landscape of ICO-based endorsements becoming increasingly popular as the crypto markets hit a fever pitch to end 2017 and through the start of this year. Considering the lack of consumer knowledge surrounding crypotcurrency, in addition to the significant investor FOMO that was generated during the bull run, it became common place for coins to pump double digit percentage points off the exposure of a single tweet.

The blatant price hyping led the SEC to institute an explicit warning last November that ICO promotions, without disclosing the exchange of compensation, would be penalized by the regulatory agency. Despite being high profile celebrities, Mayweather and Khaled represent the first cases SEC punishment against individuals touting ICOs that violated the previous guidelines.

According to Stephanie Avakian, the SEC’s co-enforcement director, the recent cases against Mayweather and Khaled,

“highlight the importance of full disclosure to investors…With no disclosure about the payments, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements.”

Michael Lavere
About author

Cryptocurrency Writer | Bitcoin Enthusiast | Altcoin Enthusiast Reach at: [email protected]
Related posts
NEWS

Wait, Bitcoin’s Biggest Threat is Users, Not Regulation or Hackers

NEWS

Will Binance Chain (BNB) Have a Devastating Effect on Ethereum (ETH) Sending Price to Double Digits?

NEWS

Binance Chain Is Where Shitcoins Go To “Pump And Dump” One Last Time Before They Die

Crypto AnalysisNEWS

Bought the Dip? Cryptocurrency Rallies After Weekend Drop

Leave a Reply