Recently, the two co founders of Centra were arrested for conducting an ICO last year (I guess those who were here last year will remember the Centra ICO that raised over $30million) in which the SEC just claimed it was fraudulently conducted. I am actually not surprised anyway even with all the publicity stunts they pulled with Floyd Mayweather.
However, from the press article released by the SEC, here are some few things I want to point out with respect to how some investors have been officially scammed over the years and maybe they really need to start doing more diligence on the coin or token they are holding before it is too late.
The SEC's complaint alleges that Sohrab “Sam”ť Sharma and Robert Farkas, co-founders of Centra Tech. Inc., masterminded a fraudulent ICO in which Centra offered and sold unregistered investments through a "CTR Token."ť Sharma and Farkas allegedly claimed that funds raised in the ICO would help build a suite of financial products. They claimed, for example, to offer a debit card backed by Visa and MasterCard that would allow users to instantly convert hard-to-spend cryptocurrencies into U.S. dollars or other legal tender. In reality, the SEC alleges, Centra had no relationships with Visa or MasterCard. The SEC also alleges that to promote the ICO, Sharma and Farkas created fictional executives with impressive biographies, posted false or misleading marketing materials to Centra’s website, and paid celebrities to tout the ICO on social media.
Never fall for crappy publicity stunts, while investing in empty promises.
"We allege that Centra sold investors on the promise of new digital technologies by using a sophisticated marketing campaign to spin a web of lies about their supposed partnerships with legitimate businesses,” said Stephanie Avakian, Co-Director of the SEC's Division of Enforcement. “As the complaint alleges, these and other claims were simply false."
"As we allege, the defendants relied heavily on celebrity endorsements and social media to market their scheme,”ť said Steve Peikin, Co-Director of the SEC's Division of Enforcement. “Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors.”
Exactly as I said above, a lot of investors fall for empty promises even when the ICOs have no product to show for it. Anyone can be paid to do anything, so investors should know better than to fall for all the celebrity endorsement bullshit, it is just a level of scam on large scale.
For those who have been going against the idea of regulation, it seems we just do not have any choice as it is. If things keep going on the way they are, this would just keep giving the cryptocurrency space a bad name with all these scam ICOs springing up, some lazy investors falling victim all the time and not giving us the chance top progress. In as much as we want some freedom, it is apparent, humans generally cannot even free themselves from their own greed or get-rich-quick mentality.
What are your thoughts on all these? Do you think regulation would usher in a safer environment for investors or the regulatory bodies will use it to start a war against cryptocurrency?
For more on the press statement, you can visit
https://www.sec.gov/news/press-release/2018-53
