centratech ico scam

Centra Tech ICO Founders Arrested For Fraudulent Scheme Involving Unregistered ICO

 

The SEC has just released a press release stating the halt of the scam company Centra Tech. The two co-founders were arrested and charged with orchestrating a fradulent ICO that raised more than $32 million last year.



From the SEC Report:

The SEC’s complaint alleges that Sohrab “Sam” Sharma and Robert Farkas, co-founders of Centra Tech. Inc., masterminded a fraudulent ICO in which Centra offered and sold unregistered investments through a “CTR Token.”  Sharma and Farkas allegedly claimed that funds raised in the ICO would help build a suite of financial products.  They claimed, for example, to offer a debit card backed by Visa and MasterCard that would allow users to instantly convert hard-to-spend cryptocurrencies into U.S. dollars or other legal tender.  In reality, the SEC alleges, Centra had no relationships with Visa or MasterCard.  The SEC also alleges that to promote the ICO, Sharma and Farkas created fictional executives with impressive biographies, posted false or misleading marketing materials to Centra’s website, and paid celebrities to tout the ICO on social media.

According to the complaint, Farkas made flight reservations to leave the country, but was arrested before he was able to board his flight.  Criminal authorities also arrested Sharma.

“We allege that Centra sold investors on the promise of new digital technologies by using a sophisticated marketing campaign to spin a web of lies about their supposed partnerships with legitimate businesses,” said Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement.  “As the complaint alleges, these and other claims were simply false.”

“As we allege, the defendants relied heavily on celebrity endorsements and social media to market their scheme,” said Steve Peikin, Co-Director of the SEC’s Division of Enforcement.  “Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors.”

The SEC’s complaint, filed in federal court in the Southern District of New York, charges Sharma and Farkas with violating the anti-fraud and registration provisions of the federal securities laws.  The complaint seeks permanent injunctions, return of allegedly ill-gotten gains plus interest and penalties, as well as bars against Sharma and Farkas serving as public company officers or directors and from participating in any offering of digital or other securities.  In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Sharma and Farkas.

Centra Tech is a Delaware Corporation, headquartered in Miami Beach, Florida. Centra Tech offers blockchain products such as a Wallet to store digital assets, a Prepaid Card to spend the digital assets, and three soon to be released products and services, which include a Marketplace to buy goods with the digital assets, a cryptocurrency Exchange Platform to buy, sell and trade digital assets, and a open-source hyper speed DPoS Blockchain.

centratech ico scam
Sam Sharma (left) and Robert Farkas (right)



The Centra Tech ICO made a lot of headlines during it’s launch September of last year as it was promoted by major celebrities like champion boxer Floyd Mayweather and hiphop icon DJ Khaled.

centra tech ico floyd mayweather

centra dj khaled scam

Celebrity endorsements are usually a paid deal, so we can assume Mayweather and Khaled were not aware of the scam. It is alarming though how a fraudulent company can use legitimate public figures to help promote a product to the masses. Centra Tech also claimed to have relationships with a number of well known financial companies, including Visa, Bancorp, and Mastercard. They were sent cease-and-desists from the companies to stop advertising the false claims.

Also alarming, the CTR coin was listed on a number of prominent exchanges, and currently has a value of $0.22 with a total circulating supply of 68,000,000 CTR. The Centra Wallet was also listed on the Google Play and Apple App store. All signs pointed to Centra Tech being a legitimate company.

centra ctr scam



The company received their first class-action lawsuit in December of last year, which is when it was discovered company bank accounts were emptied out and Farkas was arrested while trying to leave the country.

Investors who were burned by investing in Centra Tech should contact the SEC and file a complaint as there are most likely several others in the same situation and have cases being worked on.