Legal

Celeb Cryptocurrency Fave Centra Hit With Class-Action Lawsuit

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Centra, a startup that raised over $30 million this year through an ICO promoted by celebrities, has been hit with a class-action lawsuit.

According to Fortune, the suit alleges that Centra’s founders made multiple deceptive statements and sold an unregistered security.

The suit, filed in U.S. district court in Florida, seeks repayment of the Centra investments of primary plaintiff Jacob Zowie Thomas Rensel and other investors.

From July to October of this year, investors traded cryptocurrency – such as bitcoin, Ether and Litecoin – for a new cryptocurrency to be created by Centra, who claimed it would also create a debit card that allowed cryptocurrency to be spent through established credit card networks.

The suit goes on to allege that Centra made multiple false claims, including that it had signed an agreement with Visa toward creation of the planned card – but The New York Times reported in late October that Centra had no such agreement with Visa or Mastercard.

That same report revealed that Centra’s founders had no experience in cryptocurrency engineering, or with the credit card business. Some had even previously been accused of business fraud and financial negligence, and faced perjury charges in a drunk driving case. Other people initially listed as founders of the project were apparently fictional.

Floyd Mayweather, Jr. was one of the celebrities endorsing Centra during the ICO. Centra claimed that the boxer’s endorsement of their project was ongoing, but a spokesman for Mayweather said his endorsement was a one-off deal, paid for in cash.

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