Cryptocurrency startup Centra Tech, endorsed by boxing legend Floyd Mayweather Jr. and American record producer DJ Khaled, has been charged with fraud by the US Securities and Exchanges Commission (SEC) over its Initial Coin Offering (ICO).

Additionally, leading virtual cryptocurrency exchange Binance has denounced the comapny and warned its users that its team is closely monitoring the case. The exchange further added that it will give users a 72-hour notice, in case the team opts to delist the coin from its platform.

As the news broke the price of CTR plumeted over 70%, despite a large spike in volume over last few hours which bounced the price slightly the coin is down 72.48% over a two week period.

Binance May Delist CTR Token

In December last year, a group of investors filed a class action lawsuit against Centra Tech at the U.S. District Court in Florida. These investors found the project dubious and demanded a refund. At the time, the complaint stated team members on Centra’s website were made up, and that the project was trading unregistered securities. Centra Tech, in a blog post, claimed that the plaintiff’s allegations were false. Nevertheless, the company’s CTR token managed to be listed on popular exchanges like Binance and Cryptopia.

The Centra Wallet app was also approved on both Google Play and Apple’s app Store. After learning about the SEC’s investigation, Binance issued a warning against the token, hinting that it may delist it.

The warning read,

“This is a special announcement about the high risk associated with the CTR token in light of the information released earlier today relating to the controversial and fraudulent acts by members associated with the Centra Tech team”.

Celebrity-Backed ICO Raises Red Flags

The SEC had charged the founders of Centra Tech – Sohrab “Sam” Sharma and Robert Farkas – for not complying with the SEC’s anti-fraud laws. The regulator has in the past warned celebrities not to make paid ICO endorsements. Yet, several celebrities often promote fundraising projects on social media. This incident highlights how fraudulent cryptocurrency fundraising projects use influencers to raise funds.

Centra Tech raised funds after American professional boxer Floyd Mayweather and artist DJ Khaled promoted it’s unregistered token – CTR – on social media. According to an SEC complaint filed in the District Court of Southern New York the founders, Sharma and Farkas, swindled about $32 million from investors.

Spending bitcoins ethereum and other types of cryptocurrency in Beverly Hill https://t.co/q9VZ3MzpK8 pic.twitter.com/BYyOFUnm8W — Floyd Mayweather (@FloydMayweather) September 15, 2017

Sharma and Farkas have both been arrested. Farkas was notably attempting to flee the country was apprehended by officers. Reports suggest he was about to board his plane.

Fake Connections to Visa and Mastercard

The project claimed to offer a debit card that would allow direct conversion from cryptocurrencies to fiat. The founders professed that the project was backed by global payments companies Visa and Mastercard. Moreover, the SEC complaint indicates that the fraudulent project created fake identities of its CEO Michael Edwards and CFO Jessica Robinson.

Even its social profiles exaggerated its false qualifications. In a statement, Stephanie Avakian, co-director of the SEC’s Division of Enforcement, said