TMZ: Floyd Mayweather, DJ Khaled Sued for Alleged Illegal Cryptocurrency Scam

Alec Nathan@@AlecBNathanFeatured ColumnistOctober 19, 2018

LOS ANGELES, CA - FEBRUARY 20:   Floyd Mayweather Jr. talks with DJ Khaled after the game between the Golden State Warriors and the Los Angeles Clippers on February 20, 2016 at STAPLES Center in Los Angeles, California. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and/or using this Photograph, user is consenting to the terms and conditions of the Getty Images License Agreement. Mandatory Copyright Notice: Copyright 2016 NBAE (Photo by Andrew D. Bernstein/NBAE via Getty Images)
Andrew D. Bernstein/Getty Images

Boxer Floyd Mayweather Jr. and entertainment mogul DJ Khaled reportedly are being sued for their roles in an alleged illegal cryptocurrency scam.

According to TMZ, Mayweather and Khaled signed endorsement deals with Centra Tech, which billed itself as a company that sold financial products related to cryptocurrency. 

Investors who sunk $32 million into Centra Tech are now seeking to reclaim their money along with damages after the company's founders were arrested and charged with wire fraud and securities fraud in April.

According to TechCrunch.com's John Biggs, Centra Tech founders Raymond Trapani, Sohrab Sharma and Robert Farkas "were found guilty of trying to defraud investors with their ICO (initial coin offering)."

In a press release, the U.S. District Attorney's Office in the Southern District of New York said the three founders "purported to offer cryptocurrency-related financial products, with conspiring to commit, and the commission of, securities and wire fraud in connection with a scheme to induce victims to invest millions of dollars’ worth of digital funds for the purchase of unregistered securities, in the form of digital currency tokens issued by Centra Tech, through material misrepresentations and omissions."

Mayweather and Khaled both posted about investing in Centra Tech last year. 

The founders of Centra Tech could face a minimum of five years in prison, per Biggs. 

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