The U.S. Securities and Exchange Commission (SEC) has charged boxer Floyd Mayweather Jr. and music producer “DJ Khaled” with failing to disclose payments.
The charge is about payments they received for promoting investments in initial coin offerings (ICOs). SEC last year November warned about such promotions.
The two did not admit or deny the regulator’s charges, but agreed to pay a combined 767,500 U.S. dollars in fines and penalties, the SEC said in a statement on Thursday.
There has been a rise in self-proclaimed social media personalities who charge thousands of dollars for positive reviews of cryptocurrencies without disclosing their investments in the asset.
“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.”