The U.S. Securities and Exchange Commission is continuing its crackdown on illegal initial coin offerings, taking action against another ICO, this one promoted by former World Heavyweight boxing champion Floyd Mayweather.

Sohrab “Sam” Sharma and Robert Farkas, co-founders of a company called Centra Tech Inc., have been charged by the SEC and subsequently arrested by local authorities for “orchestrating a fraudulent ICO that raised more than $32 million from thousands of investors.”

Centra Tech, according to its website, was offering a veritable checklist of blockchain-related products, including a cryptocurrency wallet, a linked payment card, an online marketplace to buy goods with digital assets, a cryptocurrency exchange platform and an open-source custom blockchain.

The SEC is claiming that the CTR token offered in the ICO was an unregistered investment. It also charged that the payment card was claimed in the ICO to be backed by Visa and MasterCard even though the company had zero relationship with either, and that the ICO promotion material included fictitious company executives and other false and misleading materials.

“We allege that Centra sold investors on the promise of new digital technologies by using a sophisticated marketing campaign to spin a web of lies about their supposed partnerships with legitimate businesses,” Stephanie Avakian, co-director of the SEC’s Division of Enforcement, said in a statement. “As the complaint alleges, these and other claims were simply false.”

The use of celebrities, particularly Mayweather, was also noted by the SEC, which added that the defendants “relied heavily on celebrity endorsements and social media to market their scheme.”

The SEC publicly disclosed its interest in the ICO market in July, saying that tokens tied to equity constitute financial securities and are therefore subject to securities law. Since that time, the commission has shut down a number of dubious ICOs with more possibly to come, acknowledging in March that it had “dozens” of open investigations into ICOs.

Sharma and Farkas have been charged with violating the antifraud and registration provisions of the federal securities laws. The SEC is seeking permanent injunctions and return of allegedly ill-gotten gains, plus interest and penalties. In addition to the SEC charges, the pair has also been charged separately by the U.S. Attorney’s Office for the Southern District of New York on related criminal charges.

The SEC did not announce any charges against Mayweather, whose Instagram posts endorsing the offering have been deleted.

Photo: Floyd Mayweather/Facebook