Founder of Centra Tech sentenced to 7 years in prison

by in Blockchain News

Prison

The US Federal Court in Manhattan sentenced the founder of a fraudulent ICO worth $25 million to 87 months in prison and a fine of $250,000.

On June 16, the founder of the cryptocurrency firm Centra Tech, Robert Farkas, who organized the ICO, pleaded guilty to conspiracy to commit securities fraud.

The case of Centra Tech co-founders Sohrab Sharma and Raymond Trapani will be considered in November this year.

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In general, Centra Tech was based on distorted facts and lies about key employees of the company. The firm also promised to release a Centra Card for cryptocurrency payments, which supposedly had to work in all retail outlets where Visa or Mastercard are accepted. However, it turned out that the company did not conclude any relevant agreements, and it did not have the corresponding licenses from Visa and Mastercard.

The organization also had a nonexistent CEO named “Michael Edwards,” who allegedly was a graduate of Harvard University with a Master's degree in business administration and had over 20 years of banking experience. Centra Tech organizers also lied about the availability of remittance licenses in 38 US states so investors would bet more on ICOs.

The ICO Centra Tech, which took place from July to October 2017, was supported by famed boxer Floyd Mayweather and DJ Khaled.

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In 2018, the US SEC accused both celebrities of illegally promoting an ICO, in which they did not inform their followers that they acted as part of a paid advertising campaign.