U.S. SEC fines Floyd Mayweather and DJ Khaled over token offerings

Undefeated boxer Floyd Mayweather Jr. of the U.S. attends a news conference to announce he is joining Japanese Mixed Martial Arts promotional company Rizin Fighting Federation, in Tokyo, Japan.

Boxer Floyd Mayweather Jr. and music producer DJ Khaled failed to disclose payments they received for promoting investments in initial coin offerings, the U.S. Securities and Exchange Commission (SEC) said on Thursday.

Neither Mayweather nor Khaled Mohamed Khaled admitted or denied the regulator’s charges, but agreed to pay a combined $767,500 in fines and penalties, the SEC said in a statement.

It was reported this week on the rise in self-proclaimed social media personalities who charge thousands of dollars for positive reviews of cryptocurrencies without disclosing their investments in the asset.

The SEC issued a warning about promotion of online fundraisers known as initial coin offerings (ICOs) on November 1 last year.

“Any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion,” the SEC said in a public statement posted on its website.

Echoing this sentiment on Thursday, one of the directors of the SEC’s enforcement division, Steven Peikin, said that 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.

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