One of the founders tried to leave the country but was arrested before he could board the plane, according to the SEC.
Two Miami-based founders behind the controversial cryptocurrency startup Centra are facing federal criminal and civil charges related to the company’s $32 million initial coin offering (ICO) in September.
Criminal authorities charged and arrested Sam Sharma and Robert Farkas on Sunday, accusing them of orchestrating a fraudulent ICO, the US Attorney’s Office for the Southern District of New York announced Monday. Additionally, the Securities and Exchange Commission announced civil fraud charges against the pair in a related action.
“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,” Stephanie Avakian, codirector of the SEC’s Division of Enforcement, said in a statement. “As the complaint alleges, these and other claims were simply false.”
The SEC first notified Sharma that Centra was under investigation in mid-February, according to the civil complaint. By March 30, “Centra’s bank accounts were depleted and most of its employees had been terminated.”