The founder of a company that raised $32 million in an illegal initial coin offering has pleaded guilty to committing securities and wire fraud.

Centra Tech launched in 2017 with a veritable checklist of blockchain-related products, including a cryptocurrency wallet, a linked payment card, an online marketplace to buy goods with digital assets, a cryptocurrency exchange platform and an open-source custom blockchain.

Along with that list, Centra Tech also claimed that its payment card was backed by both Visa Inc. and Mastercard Inc. even though the company had no relationship with either firm. Company promotions also included fictitious company executives and other false and misleading materials.

A company trying to raise money through the ICO process at that time, often illegally, was not remarkable, but Centra Tech stood out from the crowd with celebrity endorsements from former World Heavyweight boxing champion Floyd Mayweather and music producer Khaled Khaled.

The U.S. Securities and Exchange Commission shut down the ICO in April 2018 and Mayweather settled charges with the commission in November 2018.

The company had two founders, Sohrab “Sam” Sharma and Robert Farkas, the latter pleading guilty today to charges in relation to the ICO.

“Farkas and his co-conspirators duped ICO investors into investing digital currency worth millions of dollars based on fictitious claims about their company, including misrepresentations relating to its purported digital technologies and its relationships with legitimate businesses in the financial services sector,” Craig Stewart, U.S. attorney in the Southern District of New York, said in a statement today. “Whether in the context of traditional equity IPOs or newer cryptocurrency-related ICOs, raising capital through lies and deceit is a crime.”

The year 2017 was the new Wild West when it came to cryptocurrency with a flurry of often dubious initial coin offerings. Even companies with listed stocks claiming they were doing something with blockchain gained attention at the time, such as when U.K. internet firm On-line plc added blockchain to its company name and saw shares surge 394%.

Having pleaded guilty to one count of securities fraud conspiracy and one count of wire fraud conspiracy, Farkas faces a maximum penalty of five years in prison on each count.

Image: Centra Tech