SEC arrested a racket of cryptocurrency scheme, endorsed by celebrities

The co-founders of Centra Tech Inc. Sohrab Sharma and Robert Farkas were incarcerated with the charges of fraud after purportedly duping investors through Initial Coin Offering. On Monday, Securities and Exchange Commission disclosed fraud charges against founders of Centra Tech. 

Sharma and Farkas are claimed to offer unregistered investments in the company through the sale of CTR virtual tokens. Thus, which are similar to Bitcoin, Ethereum and digital coins. SEC asserts that Sharma and Farkas were a part of $32 million cryptocurrency investment scheme. However which was choked by personalities like Floyd Mayweather  Jr. and DJ Khaleed.

SEC’s Statement on arresting Sharma and Farkas:

Stephaine Avakian, Co Director of the SEC’s enforcement division asserted that “We allege that Centra sold investors on the promise of new digital technologies by using a sophisticated marketing campaign to spin the web of lies about their supposed partnerships with legitimate businesses”.

Further, SEC deposes that Sharma and Farka have deluded investors with soaring promises to advance cutting edge technology through the funds raised in ICO. The firm alleges to be backed by Visa and Master Card in designing the credit card which can convert cryptocurrencies into U.S dollars. Therefore, these cards were endorsing the scheme through a company website with fictional executives.

Later, Steve Peikin Co-director of SEC’s enforcement division stated that the defendants relied heavily on celebrity endorsements and social media to market their scheme.

As stated, Promotions and marketing strategy are not a mocking by the registration of SEC and requirements of disclosure features by investors.

Step taken by SEC:

SEC’s action against Centra is a pervasive effort to eliminate fraud among upcoming cryptocurrency investments. The organization is trenching several companies which have offered cryptocurrency-related investments or have pivoted to the field.

SEC Chairman, Jay Clayton and Commodity Futures Trading Commission Chairman J. Christopher Giancarlo are collaboratively working on various clampdowns. However, they have called congress for greater authority to investigate cryptocurrencies exchanges.

Legislators are holding back from drafting new rules and standards which they learn about the methods cryptocurrencies endeavor in the market. As well as Virtual currencies are obscuring, old lines regulators which are utilize to enforce financial markets. Simultaneously, investors are scared from Congress that can hinder cryptocurrency industry.

Is celebrities are misusing cryptocurrencies potentials? Share your opinions on Twitter and Telegram. 

Image Source: Securities and Exchange Commission

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