Will Floyd Mayweather Be Knocked Out By His Cryptocurrency Bet On Stox?

Written by Dana Sanchez

Boxer Floyd Mayweather boasted that he is going to make a ton of money in cryptocurrency from blockchain startup Stox.com, but promoting the Aug. 2 initial coin offering garnered him criticism and even speculation that Mayweather may be engaging in illegal activity.

ICOs are a blockchain-based fundraising method where companies raise money from the public and offer digital coins in return. This year alone, dozens of companies—most of them virtually unknown—have raised more than $1 billion combined in ICOs.

The Stox ICO raised $33 million worth of Ethereum, a company spokesperson said. It received backing from 2,500 contributors in the first six hours of the sale. Mayweather helped attract mainstream attention to the ICO after he took to Instagram to promote it, despite being a U.S. citizen and therefore blocked from accessing the sale’s website, CoinDesk reported.

Although ICOs have been mostly unregulated, as a U.S. citizen or resident you can’t theoretically participate in an ICO. “Only accredited investors can partake in private placements of securities,” according to The Merkle:

“While some people would urge all cryptocurrency ICOs are tokens and not securities, regulators will have a very different opinion regarding this matter. A lot of the ICOs we have seen can be labeled as traditional sales of equity.”

Combined, ICOs have raised more than $1.37 billion, according to Lex Sokolin, a partner at fintech analytics firm Autonomous NEXT, Business Insider reported. Some crowdfunding events have raised hundreds of millions of dollars.

The level of cryptocurrency participation is getting hard to ignore. So much so that Goldman Sachs is educating its big-money clients about cryptocurrencies, acknowledging that “it’s getting harder for institutional investors to ignore the cryptocurrency market with total assets ballooning to $120 billion and bitcoin soaring more than 200 percent this year,” Fortune reported.

On a July 27 Instagram post, Mayweather showed a suitcase full of $100 bills in a jet, and boasted he will “make a $hit t$n of money … on the Stox.com ICO”

This prompted John Mannes to write a Tech Crunch post suggesting Mayweather is engaging in a risky securities offering. Entitled “Dear Floyd Mayweather, you’re why the SEC exists,” the post generated vigorous debate.

Asked about Mayweather’s role in the ICO, a spokesperson for the Stox told Business Insider that U.S. investors are not able to participate in the ICO. The company declined to comment further.

Stox.com offers a market prediction platform that aims to enable users to predict future events in everything from finance to politics.

“It’s impossible to know if Stox paid you to promote their ICO,” Mannes wrote. “It’d be fairly sleazy if they did, but either way, you have a responsibility to be forthcoming about what you stand to gain and what your passionate followers stand to lose.”

Mayweather is in tax trouble with the IRS, Market Watch reported.

He reportedly owes $22 million-plus in back taxes on his winnings from the Manny Pacquiao bout. Mayweather is reportedly asking the IRS if he can wait until after his Aug. 26 mega-fight with mixed martial arts fighter Conor McGregor to pay back the 2015 tax liability.

Mayweather is expected to earn over $100 million in that fight.

Here’s how Goldman Sachs described ICOs, according to Fortune:

The amount of money funding ICOs has grown exponentially and the speed at which cash is raised with often little more than a white paper and internet browser has sounded the alarm bells from parties including the Securities and Exchange Commission and the People’s Bank of China. According to Coin Schedule, ICOs have raised $1.25 billion this year, outpacing global angel and seed stage internet venture capital funding in recent months. (Goldman strategists didn’t address whether institutional investors should be buying cryptocurrencies or not.)

The last word goes to Brownie Hawkins, who posted this on Facebook in response to the TechCrunch letter, “Dear Floyd Mayweather, you’re why the SEC exists”:

 

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About Dana Sanchez

Dana Sanchez is the editor of Moguldom.com and AFKInsider.com. She has worked in digital and print news media as a business writer and news editor. She has a master’s degree in mass communications from the University of South Florida. Prior to working in news, Dana worked in advertising.


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