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Thursday, April 5, 2018

DJ Khaled may have just played himself - the ICO he and Floyd Mayweather endorsed is under criminal investigation...

Centra claimed they had developed a debit card that would allow users to link their cryptocurrency wallets to it, then spend their Bitcoin or Ethereum anywhere Visa and MasterCard is accepted.  Even going so far to claim they had a partnership in place with the credit card companies to make this happen.  The ICO went on to raise $32 million.

But the US Government says - that partnership never existed, and is now the SEC is pursuing Centra for fraud.

“They claimed, for example, to offer a debit card backed by Visa and Mastercard that would allow users to instantly covert hard-to-spend cryptocurrencies into US dollars or legal tender. In reality,  Centra had no relationships with Visa or MasterCard.” reads the SEC complaint which can be read in full here

However, Centra did have two other real partnerships - with celebrity endorsers DJ Khaled and Floyd Mayweather.

Also cited in the SEC complaint "As we allege, the defendants relied heavily on celebrity endorsements and social media to market their scheme".

So far however Khaled and Mayweather haven't been charged with any crimes.  But that doesn't mean they're in the clear yet - they may have violated securities law by promoting the ICO without disclosing the amount of their compensation. 

At this point the SEC investigation is focused on the company founders - but the case still could expand to include Khaled and Mayweather.

*Update* - Centra's token has also now been delisted by Binance.
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Author: Ross Davis
San Francisco News Desk