An initial coin offering (ICO) that has been promoted boxer Floyd Mayweather, Jr. and music producer DJ Khaled, is caught in the middle of a recent class-action lawsuit.
Filed on Dec. 13, the lawsuit fingers Sohrab Sharma, Raymond Trapani, Robert Farkas and William Hagner, and Centra Tech, Inc., as defendants, where they are accused of violating U.S. securities law via a token sale that raised $30 million for the creation of a cryptocurrency-based debit card.
The filing comes just over a month after two of the firm’s founders left the startup following the sale’s completion, in addition to a published profile of them and the ICO by The New York Times.
In the complaint, lawyers stated that:
“…in connection with Centra Initial Coin Offering (the “Centra ICO”), Defendants raised over $30 million in digital cryptocurrencies by offering and selling unregistered securities in direct violation of the Securities Act.”
The complaint additionally accuses defendants of misleading investors about their relationships with plastic networks Visa and Mastercard. They also alleged that the defendants listed fake team members on its website.
Coindesk writes that “the Centra ICO was notably promoted by Mayweather as well as music producer DJ Khaled – one of a number of examples of celebrity-endorsed token sales. The original posts by Mayweather on Instagram and Facebook that promoted the sale appear to have been deleted, and a post on Instagram by DJ Khaled is also unavailable as of press time.”
A full copy of the class-action complaint can be found below: