Founders of $32 Million Mayweather-Backed ICO Indicted for Securities Fraud

The founders of a high-grossing initial coin offering (ICO) have been indicted for defrauding investors in the course of operating their cryptocurrency company, Centra Tech. On Monday, the US Attorney’s Office for the Southern District of New York announced that it had filed charges against Sohrab Sharma, Raymond Trapani, and Robert Farkas, who co-founded and operated Centra Tech.

 

Authorities allege that in addition to holding an unregistered securities offering the Centra Tech operators “engaged in fraudulent conduct and made material misstatements and omissions designed to deceive investors,” including lying about having partnerships with large financial institutions such as Visa and Mastercard.

US Attorney Robert Khuzami said that the defendants had further created a fictitious CEO in an attempt to give the scheme more credibility:

 

“As alleged, the defendants conspired to capitalize on investor interest in the burgeoning cryptocurrency market. They allegedly made false claims about their product and about relationships they had with credible financial institutions, even creating a fictitious Centra Tech CEO. Whether traditional or cutting-edge, investment vehicles can’t legally be peddled with falsehoods and lies.”
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