There is no doubt that one of the current problems with the cryptocurrency space is the fact that there is rampant fraud in the initial coin offerings (ICO) sector. Many have tried to point out that as long as there is a certain amount of fraud in this space, it will prevent institutional money from coming into the space. Although the SEC has been cracking down on the cryptocurrency space, it is clear that they are also profiting from cracking down on these companies, as well.

There have been a considerable amount of “exit scams”, where cryptocurrency projects go out of their way to appear legitimate, but simply end up disappearing with the money raised. This criminal enterprise can often be extremely profitable. For example, a Vietnamese cryptocurrency company called Modern Tech launched an ICO by the name of Pincoin token, pulled off an exit scam to the tune of over $600 million. There are several “exit scams” that have allowed criminals to exit with millions besides Pincoin, as well.

The SEC has taken notice of the issue, and has vowed to crack down on cryptocurrency scams in order to help regulate the space. Recently, the SEC halted the Dallas-based AriseBank ICO earlier this year. The organization also halted two cryptocurrency products several months ago, as well. In a news story that has grabbed international headlines; two celebrities have been formally charged by the SEC for promoting cryptocurrency without disclosing that they were paid for aforementioned promotion.

Centratech had recruited boxing legend Floyd Mayweather Jr. and world-famous DJ/social media superstar DJ Khaled to promote their ICO. Mayweather did not disclose that he was paid $100,000 from Centra Tech, and Khaled did not disclose that he was paid $50,000, and both promoted the ICO. The ICO was actually separately charged by the SEC, and criminal charges were filed against the founders of Centra Tech earlier this year.

Khaled and Mayweather have not only agreed to not promote securities of any kind for two years, but also are turning over the money they received to the SEC, and also agreed to paying penalties and interest, as well.

In a tweet from August of last year that has not been deleted; Mayweather promotes an ICO and proclaims, “You can call me Floyd Crypto Mayweather from now on”. Mayweather is considering one of the best boxers of all time, and boasts a Twitter following of almost 8 million users.

“Social media influencers are often paid promoters, not investment professionals, and the securities they’re touting, regardless of whether they are issued using traditional certificates or on the blockchain, could be frauds,” stated Steven Peikin, a SEC enforcement division co-director.

DJ Khaled has a Twitter following of over 4 million users, but he is most known recently for being able to monetize his Snapchat following. He has become synonymous with the platform, with Wired even questioning why he didn’t benefit from its initial public offering. His “snaps” get millions of views on average, and has helped spawn cultural phrases such as “major key”. He has even leveraged his following to sign major sponsorship deals with large corporations such as Turbotax, as well. He started using the app in 2015, a year which saw the users grow dramatically from 107 million to 158 million daily active users. The charismatic DJ is known for his motivational messages, and also involves his young son in his social media constantly. His son – only two years old – boasts over 2 million followers on Instagram.

The case is historic, given the fact that this is the first time that the SEC has brought charges against an individual for promoting an ICO. Time will tell just how much the SEC will profit off of future crackdowns.