September 22, 2020

SEC fined Floyd Mayweather and DJ Khaled for advertising blockchain projects

SEC fined Floyd Mayweather and DJ Khaled for advertising blockchain projects

The US Securities and Exchange Commission (SEC) has launched an investigation into promotions in social networks aimed at promoting ICO projects from blockchain startups. The boxers Floyd Mayweather and DJ Khaled were among the violators.

SEC representatives said that people whoadvertise ICOs on social networks and can be penalized on YouTube if the organizers of the initial coin offer violate the law. In addition, each person promoting tokens recognized as securities is required to report the amount of remuneration received for their work. If you refuse to provide this information, the marketing campaign will be deemed fraudulent.

SEC warns investors that the decision tobuying cryptocurrencies should not be accepted based on statements from celebrities advertising ICOs. According to the Commission, most famous people do not have the necessary knowledge and therefore can not give practical advice on the best investment. If the leaders of the crypto company pay for advertising their ICO, then the tokens automatically receive the status of securities and are subject to the securities law.

Last week, SEC chairman Jay Claytonsaid that Bitcoin is not a security, however, most tokens sold during the ICO have the status of a security, therefore, blockchain startups are required to register with the SEC. He also said that for violation of ICO advertising requirements, the perpetrators will be fined 2 times the amount of payment for the promotion of the project. Blockchain companies paid Floyd Mayweather $ 300,000, so the fine was $ 600,000. DJ Khaled received $ 50,000 from Centra Tech, so he was fined $ 100,000.