The co-founder of cryptocurrency firm Centra Tech, Sohrab Sharma, is facing charges related to a $25 million initial coin offering scam and is reportedly planning to plead guilty. According to the Bloomberg report, Sharma may avoid a November trial date as his lawyers told a federal judge he would be interested in changing his plea. Earlier, Sharma’s associate Robert Farkas was convicted of conspiring to commit securities and wire fraud on June 16. Farkas faces up to 87 months in prison and a $250,000 fine.
The founders of the crypto scam were arrested in 2018.
The US Department of Justice (DoJ) stated that the three founders of the crypto scam Sharma, Farkas, and Raymond Trapani were arrested in April 2018. The three founders of the crypto scam reportedly lied to investors about having a fictitious Chief Executive Officer at Centra Tech, Michael Edwards, as well as having a money transmitter license in 38 states. The company made false claims about partnerships with major firms, including credit card giant Visa. The three founders used these claims to dupe people into investing in Centra Tech’s initial coin offering (ICO) of Centra tokens, also called CTR tokens.
Celebrities endorsed Centra Tech ICO.
When the ICO of Centra Tech was held between July and October 2017, it was endorsed by celebrities like the former pro boxer Floyd Mayweather and music producer DJ Khaled on their social media platforms. However, both celebrities were charged for promoting the fake ICO and were fined by the Securities and Exchange Commission. Both had failed to disclose payments they received from Centra Tech to their followers. The case involving the third co-founder in this enterprise, Trapani, is still scheduled for trial in November. For the past few years, the US SEC has been strict about cracking down on fake initial coin offerings.