Class Action Lawsuit Filed Against Centra ICO that Was Pumped by Floyd “Crypto” Mayweather

Initial Coin Offerings are fat targets for attorneys representing disgruntled investors. Tezos is the most prominent example of an ICO gone bad due to the very public internal infighting, the fact that creators attempted to describe investments as donations and the hundreds of millions of dollars in crypto ultimately raised. Today, we have a class action lawsuit filed against the Centra ICO on behalf of Plaintiff Jacob Zowie Thomas Rensel.

The Centra ICO received the tacit endorsement of Boxing Champion Floyd Mayweather, sometimes know as “Floyd Crypto Mayweather” was joined by world famous rapper DJ Khaled that “led to a patina of credibility,” according to the New York Times. Of course, this is just nice talk meaning they pumped the ICO on their social networks.

 

Centra Tech even announced Floyd Crypto Mayweather as an official “Brand Ambassador,” back in September.  Floyd Crypto was expected to “spread the word to mainstream media about the benefits of the Blockchain-based ecosystem.”

“We are proudly welcoming World Champion Boxer, Floyd ‘Money’ Mayweather JR to the Centra team as an official Brand Ambassador,” said Sam Sharma, president and co-founder of Centra, at that time.

Today, the ICO is a bit less rosy as Komlossy Law in Florida filed in the US District Court of Southern Florida for a trial by jury as the “Defendants raised over $30 million in digital cryptocurrencies by offering and selling unregistered securities in direct violation of the Securities Act.”

The filing continues to explain the Defendants, including  Sohrab Sharma , Raymond Trapani, Robert Farkas, and William Hagner, made a feeble attempt to portray the Centra ICO as a sale of “utility-based tokens” that were “not securities, shares or investments.” Allegedly, this took place even while the Defendants touted the growth potential of the CTR Tokens and called purchasers investors.

Additionally, the class action filing claims: “the Centra ICO unabashedly stated that participants would be able to use the CTR Tokens “or trade them on cryptocurrency exchanges for a profit.”

As we should all know by now, promoting an ICO as potentially generating investment returns and then calling it a utility is something the Securities and Exchange Commission does not like. In fact, it is against the law. The SEC recently shut down the Munchee ICO for doing something similar to the Centra ICO.

While the SEC may have passed on initiating an enforcement action against the Centra ICO because it was a pre-DAO Report, that does not mean a private attorney cannot pursue legally if they believe an ICO has transpired that is allegedly in conflict with securities law.

Expect more, similar cases to come targeting ICOs that have big money in the bank but touted investment returns while claiming not to be an investment.


Jacob Zowie Thomas Rensel v Centra Tech ICO

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