U.S. Securities and Exchange Commission (SEC) announced Thursday that professional boxer Floyd Mayweather Jr. and music producer Khaled Khaled agreed to pay penalties for unlawfully promoting investments in Initial Coin Offerings (ICOs).
"These are the SEC's first cases to charge touting violations involving ICOs," the SEC said in an announcement.
The SEC found Mayweather failed to dis promotional payments from three ICO issuers, including 100,000 U.S. dollars from the crypto currency seller Centra Tech and 200,000 dollars from two other ICOs.
Khaled also failed to dis a payment of 50,000 dollars from Centra Tech, according to the SEC.
The SEC charged founders of Centra Tech with fraud in April. U.S. Attorney's Office for the Southern District of New York filed parallel criminal charges as well.
"These cases highlight the importance of full disclosure to investors," said Stephanie Avakian, enforcement division co-director of the SEC.
"With no disclosure about the payments, Mayweather and Khaled's ICO promotions may have appeared to be unbiased, rather than paid endorsements," said Avakian.
Both Mayweather and Khaled agreed to pay penalties without admitting or denying the findings. They also agreed not to promote any securities for years, according to the SEC.
"Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements," said Steven Peikin, the SEC's enforcement division co-director.
"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," Peikin added.
