Binance Warns of Delisting “High Risk” CTR Token
Binance, the world’s largest cryptocurrency exchange, has announced that it now considers the CTR token to be “high risk” and for the first time raises the possibility of delisting the token.
In a statement on its website, the Binance team says that this “special announcement” is due to the “high risk associated with the CTR token” after the revelation of “controversial and fraudulent acts by members associated with the Centra Tech team”.
Yesterday the U.S. Securities and Exchange Commission (SEC) charged Centra Tech’s co-founders with orchestrating a fraudulent ICO which “raised more than $32 million from thousands of investors last year”. Both co-founders, Sohrab “Sam” Sharma and Robert Farkas, have been arrested.
The SEC alleges that the CTR token represents an “unregistered investment” and that the founders lied about all aspects of the company and its product.
The founders claimed that they would offer “a debit card backed by Visa and MasterCard” that could be used to convert cryptocurrencies to dollars. The SEC says this was untrue and that the company had “no relationships with Visa or MasterCard”.
The SEC further alleges that on the ICO’s promotional materials the founders had created “fictional executives with impressive biographies” and posted “false or misleading marketing materials”. One of the central planks of the company’s marketing strategy was paying “celebrities to tout the ICO on social media”. Both music producer DJ Khaled and boxer Floyd Mayweather are known to have promoted the ICO this way.
The Centra Tech ICO was already subject to a lawsuit brought by disgruntled investors who believed that the token sale breached securities law. According to the SEC, co-founder Farkas had “made flight reservations to leave the country” but was arrested before he could take the flight.
Binance says that it will “seek more information” and warns that it “may take further action”, including the option of delisting the token. It alert its customers that should it take that route there will be a notice period of “no less than 72 hours”.
CTR is currently down 60% overnight on the news.
Image From Shutterstock