DJ Khaled and Floyd Mayweather Successfully Escape ICO Fraud Lawsuit
The two high-profile figures who promoted the ICO evade a lawsuit accusing them of promoting it and soliciting investors. | Source: Reuters/Shutterstock; Edited by CCN.com
By CCN.com: A federal court has dismissed a lawsuit against Floyd Mayweather, DJ Khaled, and the proprietors of Centra Tech, an ICO that centered around the launch of a crypto debit card. Mayweather and Khaled were compensated for using their vast social media presence to promote the ICO. The court has decided that this is not enough to make them “successful solicitors.”
Khaled, Mayweather Not “Successful Solicitors” for Centra Tech
The court ruled in favor of a motion to dismiss by the defendants.
In the case of Floyd Mayweather, the court specifically pointed out that there wasn’t much evidence indicating Mayweather in the poor decision making of the plaintiffs. The ruling further points out that at least two of the plaintiffs bought the Centra Tech ICO before Mayweather had even promoted it.
“The Plaintiff’s complaint fails to establish that Mayweather “successfully solicited” the Plaintiffs to purchase CTR Tokens. […] [T]here are no allegations that this was a successful solicitation, that Mayweather had any contact with Plaintiffs, or that Plaintiffs even saw the posts. […] Mayweather has no relationship with the Plaintiffs. The complaint does not allege that Plaintiffs follow Mayweather’s twitter account or that they saw his posts or video with Centra Tech. In fact, two of the Plaintiffs, Fung Poo and Lee, made their purchases before Mayweather posted on Twitter about Centra Tech. “
DJ Khaled’s motion to dismiss passed for “largely the same reasons.”
The ruling makes clear that the case could have succeeded if the plaintiffs had established that Mayweather and Khaled “created” the market. That is, there’d have been no sale without them. But crucial facts of the case make such claims impossible.
ICO Founders Get Off On Technicality
As to the ICO promoters themselves, it’s more complicated. The ruling admits they willingly created fake people with false credentials to make the ICO appear more legitimate. Mainly due to the technical nature of the complaints against him, CTO Steven Sykes had at least one count against him dismissed. It’s unclear if the case will proceed on the rest of its merits.
“The allegations against Sykes are based on his involvement with the website. The Complaint, however, is devoid of any specificity with regard to the content of the website, when the website was launched, the alleged misstatements on the website, who determined the content on the website, and if the Plaintiffs ever even visited the website. Accordingly, the Count III is dismissed as to Defendant Sykes.”
The document makes clear that “counts I and III” are dismissed, but that leaves out a crucial second count, which may be ongoing.
DJ Khaled and Floyd Mayweather previously paid fines as a result of their involvement in Centra Tech.
