FILE PHOTO: Representations of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies are seen on a PC motherboard in this illustration picture, February 13, 2018. REUTERS/Dado Ruvic/Illustration/File Photo
May 14, 2018
NEW YORK (Reuters) – U.S. prosecutors on Monday announced the indictment of three co-founders of a cryptocurrency start-up once promoted by the boxer Floyd Mayweather, accusing them of fraudulently raising more than $25 million from investors in an initial coin offering.
Sohrab “Sam” Sharma, Robert Farkas and Raymond Trapani, who co-founded Centra Tech Inc, were each charged with securities fraud, wire fraud and two conspiracy counts, according to an indictment filed with the U.S. District Court in Manhattan.
Prosecutors said the defendants, who live in Florida, misled investors in Centra tokens that they had formed partnerships with Visa Inc <V.N>, MasterCard Inc <MA.N> and Delaware-based The Bancorp Inc <TBBK.O> to issue debit cards, lied about having money transmitter licenses and created a fictitious chief executive officer.
Lawyers for the three defendants could not be immediately reached for comment.
The three men were arrested last month and the FBI seized 91,000 “Ether units” consisting of digital funds currently worth $60 million, according to a release announcing the indictment.
Authorities around the world have attempted to rein in the global boom in trading cryptocurrencies – a form of digital money created and maintained by its users.
“As alleged, the defendants conspired to capitalize on investor interest in the burgeoning cryptocurrency market,”
Deputy U.S. Attorney Robert Khuzami said in the release. “Whether traditional or cutting-edge, investment vehicles can’t legally be peddled with falsehoods and lies.”
(Reporting by Jonathan Stempel and Nathan Layne in New York; Editing by James Dalgleish and Peter Cooney)
