The SEC filed additional fraud charges in connection with the recently shut down Centra Tech, Inc. ("Centra") initial coin offering. In an amended complaint, the SEC named an additional defendant and brought forth new allegations against Centra's co-founders.
After previously charging two of Centra's co-founders, Sohrab Sharma and Robert Farkas, the SEC also charged a third co-founder, Raymond Trapani, for his alleged role in the "scheme" to defraud investors. As previously covered, the SEC claimed that Centra issued "CTR tokens," which they sold through an unregistered ICO. Further, the SEC alleged that the defendants misled investors by claiming that funds would be used to create a system to facilitate easy conversion of cryptocurrency to fiat currency. Centra represented to investors that it would issue a "Centra Card," allowing cardholders to spend cryptocurrency in real time, and made various misrepresentations about partnerships with credit card companies and eligibility of investors for a future share of company revenue. The amended complaint also includes new allegations that the defendants engaged in manipulative trading activity in order to drive up the price of CTR tokens.
In a parallel criminal action, the U.S. Attorney's Office for the Southern District of New York filed criminal charges against Mr. Trapani. Mr. Sharma and Mr. Farkas are also currently facing criminal charges.
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