Centra Tech Founder Is Guilty of Scamming

News, Opinion | March 16, 2021 By:

Crypto-industry became controversial for its strong side. Fact that the transactions are quick and easy to conduct, a big amount of money can be transferred without the possibility of tracing it or without knowing where it goes. This has given the best opportunity to scammers as they make people believe to act accordingly while offering them initial coins, which they say will become popular and profitable for the clients if they start trading or investing in it. One of the latest news regarding this case is Centra Tech founder, Robert Farkas being sentenced for scamming people of $25 million. 

Centra Tech story 

Robert Farkas is one of the co-founders of Centra Tech among Sohrab Sharma and Raymond Trapani and the company was founded in 2017. 

The Miami-based company had implied to offer crypto-based financial products such as a debit card and In July 2017, Sohrab Sharma and his partners, Robert Farkas, Raymond Trapani suggested an ICO, or token sale, raising the $25 million from investors who had thought Centra Tech’s claims would work and it would make them gain a lot of profits.

Sharma previously alleged guilty to planning to perform securities fraud, wire fraud, and mail fraud in connection with his co-conspirators’ use of material misrepresentations and omissions to solicit investors to purchase securities, in the form of digital tokens issued by Centra Tech, through dishonest fundraising efforts that included an ICO. 

The company has a tough story of scams, as it was always an active topic and not the first case. 

Celebrities had close ties with ICOs 

The promotional content was very much taken care of by the company as they had a Harvard-educated CEO. however, the content which was displayed on the website was fictitious, and the price of the token artificially inflated, to make investors buy it or at least attract them. The story is interesting in many cases and one of them is its promotional side. Many outstanding celebrities were involved in spreading the information, among them are Floyd Mayweather and DJ Khaled, for promoting Centra Tech ICO and its ‘Centra Card’, and the SEC filed an action against them, for promoting this campaign. 

The case even made the US Securities and Exchange Commission (SEC) publish an official statement where the involved celebrities had received the compensation and the statement was revealing the nature, range, and amount of compensation received in exchange for the promotion.

How to identify ICO scams? 

Nowadays, due to the increased demand on the crypto-market, a lot of scammers started using the situation for their good. Scammers have become a very natural phenomenon and not to be confused with the real opportunities, here are some examples of how to differentiate them: 

  • Team members – one of the best things to do, before starting trading or investing with any of the companies, is to find the information about their members and the team, generally. 
  • Whitepaper – whitepaper is a very important part of the project which is promoted or offered by the company. If the company is not suggesting you the whitepaper, make sure not to make close ties with it, or if they are, then read the document carefully. 
  • Token Sale – look at the price chart of the coin which was offered to you. More often, those coins are implemented with the help of crowdfunding and the prices should be volatile and should have a history of a certain period. If the coin or token does not have a timeline and is fresh and new, you should avoid buying it. 

And more importantly, you should be careful, generally with the investment in ICOs and cryptocurrency space. 

Conclusion 

Finally, to sum up, the Centra Tech case and its fraudulent activity was not a surprise for the crypto-industry and for those, who are involved in the market for a long period already. The case itself was unique because of its scale, and in scale, we mean the celebrities who were involved in promoting this ICO. The case now tells us that the scamming has reached its risky level and in the future, it will become more and more difficult to differentiate the real and fraudulent opportunities. This means that anyone, who wants to become involved in the market, should make good and thoughtful research before starting it.