As was to be expected, the SEC has continued to crack down on the initial coin offering industry. That is a positive development overall, even though not everyone sees it that way. In its latest action, the SEC has cracked down on an ICO backed by Floyd Mayweather Jr.

Centra is in a lot of Trouble

Ever since celebrities decided to lend credibility to initial coin offerings, it was a matter of time until those decisions backfired. In the case of Centra, an ICO backed by Floyd Mayweather Jr., it seems things are going from bad to worse, as the SEC has charged this project with fraud. It is a very troublesome turn of events for this industry, albeit one that’s not exactly surprising.

[Centra] claimed, for example, to offer a debit card backed by Visa and MasterCard that would allow users to instantly convert hard-to-spend cryptocurrencies into U.S. dollars or other legal tender. In reality, the SEC alleges, Centra had no relationships with Visa or MasterCard. The SEC also alleges that to promote the ICO, Sharma and Farkas created fictional executives with impressive biographies, posted false or misleading marketing materials to Centra’s website, and paid celebrities to tout the ICO on social media.

It is obvious that Centra Tech would not have ever been as big as it was without the celebrity endorsements the project received. While Floyd Mayweather Jr. has since deleted Instagram posts promoting this ICO, there is irrefutable evidence that he was involved in promoting this project. With the SEC looking closely at such endorsements, this may not be the last we hear of this story.

In the end, it is good to see the SEC clamp down on these illicit projects. The initial coin offering industry has been subject to many scams and fraud attempts. While this doesn’t mean Centra Tech had no honest intentions, the lack of a relationship with card issuers makes this project appear far less legitimate. It is clear that consumers need to be very wary when dealing with these “too good to be true” investment opportunities.