The co-founders of an unscrupulous startup are threatened with long prison terms and fines.
The Prosecutor's Office of the Southern District of New York filed charges against the co-founders of the Centra Tech Company. The three defendants (Sohrab Sharme, Raymond Trapani and Robert Farcas) are charged with the organizing the fraudulent ICO and selling the unregistered securities.
The investigation found that the startup co-founders «allowed the significant distortions and omissions to deceive investors» during the fundraising campaign. The accused promised to issue debit cards for instant conversion of cryptocurrency into dollars. The organizers of the ICO announced their partnership with Visa and Mastercard although in reality these companies were not affiliated with Centra Tech.
In October last year the defendants managed to raise $32 million but due to the fluctuations in the rate of Ethereum at the time of the detention this amount has risen to $67 million.
Centra Tech co-founders are accused of three articles at once and for each of them they face from 5 to 20 years of imprisonment. The defendants will most likely have to pay the financial damages. The case was transferred to the District Judge Lorna G. Schofield.
The organizers of Centra ICO were detained in early April 2018. The arrest was initiated by the Securities and Exchange Commission (SEC) of the United States that demanded to collect from the co-founders of the startup all collected investments plus interest and penalties.
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