'Initial Coin Offering' Duped Folks for $32 Million, SEC Says

by Leon Thompson April 4, 2018, 1:02
'Initial Coin Offering' Duped Folks for $32 Million, SEC Says

The SEC tells us this was not the case as Centra had no relationship with either credit card company.

Sharma and Farkas are facing both civil charges from the Securities and Exchange Commission and federal criminal charges.

"They claimed, for example, to offer a debit card backed by Visa and MasterCard that would allow users to instantly convert hard-to-spend cryptocurrencies into USA dollars or other legal tender", the SEC said in a statement. It was also endorsed by professional boxer Floyd Mayweather and producer DJ Khaled.

Regulators and investors, though, have generally been far more wary of the ICO space, with the lack of regulatory oversight and the youth of the industry making it an easy space for fraudulent schemes.

The U.S. Securities and Exchange Commission (SEC) alleges that Sohrab "Sam" Sharma and Robert Farkas "masterminded a fraudulent ICO in which Centra offered and sold unregistered investments through a 'CTR Token'".

It appeared that Farkas was arrested with plans to leave the country.

The SEC initially subpoenaed Centra in February, likely as part of its broad probe into ICOs. According to them, this card would enable them to convert digital currencies like Bitcoin into United States dollars among other benefits. Sharma and Farkas allegedly claimed that funds raised in the ICO would help build a suite of financial products, including a debit card backed by Visa and MasterCard that would instantly convert cryptocurrencies into USA dollars or other legal tender.

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Floyd Twitted "Centra's (CTR) ICO starts in a few hours".

Additionally, the duo carried out an aggressive social media campaign featuring celebrities such as undefeated boxing champion Floyd Mayweather and DJ Khaled. In a parallel action, the US Attorney's Office for the Southern District of NY also slapped criminal charges against the duo.

Non-Existent CEO and CFO Were Added to the Coin's Portfolio: How can anyone possibly believe any company that adds fake profiles of people in an important role?

"Mr. Sharma and Mr. Farkas are represented by personal counsel who will be handling the matters", a statement released by their attorney said.

The New York Times reported at the time that, shortly after the ICO closed on October 5, 2017, Sharma and another co-founder, Ray Trapani, also faced an unrelated perjury indictment by a Manhattan grand jury, which emerged from a drunk-driving case.

"Centra Tech is aware of the allegations and will not be commenting".

Neither celebrity is accused in the scheme which the SEC yesterday said raised more than Dollars 32 million from thousands of investors.

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