Music producer DJ Khaled and champion boxer Floyd Mayweather Jr. have been charged by the Securities and Exchange Commission with promoting initial investments in cryptocurrency without revealing that they had already been paid.
The SEC has established previously that cryptocurrency coins sold in initial offerings could be labeled as securities and, therefore, subjected to federal law, CNN reported.
Khaled and Mayweather quickly settled with the SEC after each was charged on Thursday and agreed not to promote securities, including digital ones, for two years and three years, respectively. Each man also agreed to return the money he’d received to the SEC and pay fines with interest.
According to CNN, Mayweather failed to reveal that he’d already received $300,000 and Khaled failed to disclose a payment of $50,000.
“With no disclosure about the payments, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements,” the SEC’s enforcement division co-director, Steven Peikin, said.
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