The Securities and Exchange Commission has charged two co-founders of Centra Tech Inc., a Miami startup, for orchestrating a fraudulent initial coin offering that raised more than $32 million from investors last year, the Wall Street Journal reported. Sohrab “Sam” Sharma and Robert Farkas, co-founders of Centra Tech, which advertised itself as building a cryptocurrency-focused debit card, allegedly directed a fraudulent initial coin offering in which Centra offered and sold unregistered investments through a “CTR Token,” the SEC said. Sharma and Farkas allegedly claimed that funds raised in the initial coin offering would help build a suite of financial products, including a debit card backed by Visa Inc. and Mastercard Inc. that would allow users to convert cryptocurrencies into U.S. dollars or another currency. To promote the ICO, Sharma and Farkas allegedly created fictional executives, lied about having relationships with the credit card companies, posted false or misleading marketing materials to Centra’s website, and paid celebrities to promote the initial coin offering on social media.
