Centra, an ICO that gained wide attention after endorsements from Floyd Mayweather, is now facing a class action lawsuit in the United States. The complaint alleges that between July 30 and October 5, 2017, the project raised more than $30 million in digital assets through the offer and sale of unregistered securities. Some reports cited in the suit suggest the total may have been closer to $50 million.
The central dispute: utility token or security
The case was filed on behalf of plaintiff Jacob Zowie Thomas Resel. According to the complaint, Centra attempted to present its ICO as a sale of “utility-based tokens” rather than securities, shares, or investment products. The lawsuit argues that this description conflicts with how the token sale was marketed to participants.
The filing says Centra explicitly referred to ICO buyers as “investors” and promoted the idea that CTR tokens would become more valuable than the cryptocurrencies contributed in exchange. In the plaintiff’s view, those statements are consistent with an investment offering and support the claim that the ICO was a clear offer and sale of securities.
Debit card and marketplace claims under scrutiny
Centra had promoted the token sale as a way to fund what it described as the world’s first multi-blockchain debit card paired with a smart and insured wallet. The proposed product was said to work on the Visa and Mastercard networks and allow users to make instant transactions with digital currencies. The company also said it intended to build an online marketplace called “cBay,” positioned as a platform similar to Amazon and eBay.
The lawsuit argues that these business ambitions did not change the legal nature of the token sale, especially if the fundraising was conducted in a manner consistent with a securities offering.
Celebrity endorsements added to investor attention
The crowdsale was backed publicly by Mayweather and DJ Khaled, highlighting how ICO issuers were increasingly using celebrity reach on social media to attract participants. Critics have argued that such endorsements may have diverted attention from a more careful review of the project itself.
The New York Times had previously suggested that the endorsements gave the project an appearance of legitimacy despite significant concerns surrounding the company. The U.S. Securities and Exchange Commission has also warned that promoting token sales involving unregistered securities can create legal exposure for those involved.
Part of a broader crackdown on ICOs
The lawsuit arrives during a period of intensifying scrutiny across the ICO market. Tezos, one of the largest token sales of its time, had already been hit with multiple class action suits. Earlier, the SEC forced Munchee Inc. to halt its ICO and return funds to investors, marking the first time the agency intervened against an ICO even without outstanding customer fraud allegations.
Against that backdrop, the Centra case underscores a broader shift: regulators and investors were paying closer attention to token classification, promotional practices, and disclosure standards across the ICO sector.