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The Securities and Exchange Commission of the United States (SEC) has accused two founders of the Centra cryptocurrency project of organizing a fraudulent ICO, appropriating investors' funds and selling unregistered securities.

Sohrab “Sam” Sharma and Robert Farkas were detained after they raised $32 million by selling "unregistered securities" to develop a number of financial products, including a debit card, that was meant to be issued in cooperation with Visa and MasterCard, allowing their users to instantly convert cryptocurrency into US dollars and other currencies. The SEC claims that there were no relationships between Centra Tech. Inc. and Visa or Mastercard.

The SEC claims that Sharma and Farkas promoted their fraudulent ICO by creating non-existent executives with impressive summaries and biographies, posting "false or misleading" materials, and also attracting celebrity campaigns to promote. American boxer Floyd Mayweather supported ICO Centra in his Instagram, but all the materials that could talk about his connection with the project were already deleted.

Stephanie Avakian, Co-Director of the SEC's Division of Enforcement, said:

"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. As the complaint alleges, these and other claims were simply false."

Sharma and Farkas are accused of violating the anti-fraud and registration provisions of the federal securities laws. The SEC demands to collect from detainees the amount attracted with interest and penalties. In addition, the regulator demands that the organizers of Centra ICO be banned from holding managerial positions and participate in any distribution of securities, digital or not.

Previously, Centra has already become the object of legal proceedings. In December, a class action was filed against the project, when investors suspected that they were selling securities under the name of tokens.

According to journalist Nathaniel Popper, SEC's subpoena to Centra was sent on 9 February, that means that its founders were aware of possible actions for almost two months. But after receiving a subpoena, they withdraw money from Centra's bank accounts and fired employees. One of the founders intended to leave the US on 1 April and even bought a ticket for the plane but was arrested.

Following the information about arrests, the crypto-exchange Kucoin froze CTR depositing services on its platforms, and Binance warned about the possible delisting of CTR tokens.

The rate of the Centra token dropped from $0.32 to $0.13, losing about 60% in a few hours.