Cryptocurrency startup Centra Tech made waves last September after securing paid endorsements from big-time celebs like boxing legend Floyd Mayweather and music producer DJ Khaled, but its bullish media run might be over. The US Securities and Exchanges Commission (SEC) has charged its owners with fraud.
And if that was not enough: leading cryptocurrency exchange desk Binance has also issued a warning against the company, informing users that its team is monitoring the situation closely. Binance further noted that in case its team opts to delist Centra Tech’s CTR token from its platform, it will give users a 72-hour notice.
“This is a special announcement about the high risk associated with the CTR token in light of the information released earlier today relating to the controversial and fraudulent acts by members associated with the Centra Tech team,” the exchange desk wrote in its announcement.
While Binance did not directly name the reason, its warning likely has to do with the investigation the SEC launched against Centra Tech earlier this week on April 2.
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The SEC complaint claims Centra Tech co-founders, Sohrab “Sam” Sharma and Robert Farkas, orchestrated a fraudulent initial coin offering (ICO) to dupe gullible investors out of $32 million, as per a report from Gizmodo. The publication further notes Farkas was detained yesterday, trying to board a flight out of the country.
In addition to the misleading paid endorsements for its ICO from Mayweather and DJ Khaled, Centra Tech straight-up lied about partnerships with several high-profile companies including Visa, Mastercard, and Bancorp.
Spending bitcoins ethereum and other types of cryptocurrency in Beverly Hill https://t.co/q9VZ3MzpK8 pic.twitter.com/BYyOFUnm8W
— Floyd Mayweather (@FloydMayweather) September 15, 2017
The SEC complaint adds that Centra Tech fabricated the identities of its CEO Michael Edwards and CFO Jessica Robinson, whose LinkedIn profiles boasted degrees and experience from known institutions like Harvard University and Johnson Communications.
Contrary to these claims though, “neither Edwards nor Robinson is a real person,” the filing reads.
For the record, Centra Tech initially ran into trouble with the SEC after the government agency issued a warning to caution cryptocurrency enthusiasts against celebrity-backed ICOs. Shortly after, the company was hit with its first class-action lawsuit alleging its operation was in violation of US securities laws.
Still, despite these signals, many exchange desks – including Cryptopia and Binance continued – to offer trading pairs for the controversial CTR token. But factoring in Centra Tech’s legal troubles, things might be about to change very soon.
The SEC filing additionally asks that the Centra Tech co-founders return all funds they received from running the operation – as relief. It is unclear whether the funds will be returned to investors though.
In the meantime, those curious to peruse the SEC filing in full can see the full document below (as uploaded by Gizmodo):
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