DJ Khaled has been charged with cryptocurrency fraud. Khaled failed to disclose payments he received for promoting investment in Initial Coin Offerings.
In a press release issued by the SEC, Khaled failed to disclose a $50,000 payment from Centra Tech Inc., which he spoke on on his social media accounts as a “game changer.” Although Khaled has yet to confirm or deny the new findings, he has agreed to pay $50,000 in disgorgement, a $100,000 penalty and $2,725 in prejudgment interest.
In addition to agreeing to pay for penalties, Khaled will not promote any securities, digital or anything similar for the next two years. Enforcement Division Co-Director Stephanie Avakian spoke on the importance of this case.
“These cases highlight the importance of full disclosure to investors,” said Avakian. “With no disclosure about the payments, Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements.”
Enforcement Division Co-Director Steven Peikin said that investors should be cautious of celebrity endorsements. “Investors should be skeptical of investment advice posted to social media platforms and should not make decisions based on celebrity endorsements,” said Peikin. “Social media influencers are often paid promoters, not investment professionals, and the securities they’re touting, regardless of whether they are issued using traditional certificates or on the blockchain, could be frauds.”
It is being reported that the SEC’s investigation remains ongoing.
SEC informs DJ Khaled that he has played himself https://t.co/pfxMaqwO3t pic.twitter.com/MOfVqdjugA
— Gizmodo (@Gizmodo) November 29, 2018
