Boxing legend Floyd Mayweather and music producer DJ Khaled are paying a total $750,000 to settle charges they failed to disclose payments they received for promoting investments in digital-currency securities, federal regulators said Thursday. The SEC said the charges are the first for violating rules on touting investments in so-called initial coin offerings – or ICOs – on three different cryptocurrencies.
An ICO allows a startup to use the technology behind bitcoin, known as blockchain, to fund projects. The SEC said Mayweather did not report that he had received $300,000 from three separate deals from that paid him to promote the offerings online.
Under the settlements, Mayweather agreed to pay a $300,000 penalty, give up another $300,000 and pay $14,775 in interest. Khaled is paying a $100,000 penalty, giving up $50,000 and paying $2,725 in interest.
They also agreed not to promote any securities, digital or otherwise, for three years in Mayweather’s case and two years for Khaled.
Mayweather and Khaled were among a number of celebrities paid by ICOs to endorse them. ICOs have soared in popularity in recent years, raising billions for startups. With an ICO, a startup will issue currency, sometimes called a token, which can be used to buy services from the company. For example, a startup offering online storage could issue tokens that can be used to buy storage.