Why is this scam
Its name has almost become synonymous with scam. Centra Tech Company which is headquartered in Miami Beach has been accused of running a scam. Finally, on April 2nd this year, Securities and Exchange Commission (SEC) charged two founders of Centra Tech. Robert Farkas and Sohrab “Sam” Sharma are accused of raising over $32 million for a planned cryptocurrency while failing to register the initial coin offering (ICO) and lying to investors. The authorities allege that the project co-founders misled investors by claiming to have a partnership with card providers MasterCard, Visa and the Bancorp while none existed. The duo are also accused of planning to sell digital tokens without complying with federal securities laws.
The signs of confirmation
Those two convinced investors to buy their CTR token, telling them that the funds raised through the ICO would be used to launch a suite of financial products. The partnership with the debit card firms will allow users to convert their CTR tokens to US dollars or other legal tenders, the complaint alleges. Farkas and Sharma created fictional executives with impressive biographies to promote the ICO and posted false and misleading marketing materials on the company’s website. They even paid celebrities to endorse the ICO on social media.
Let’s see the other signs.
Centra Tech created its token named Centra whose ticker symbol is CTR. For many months, there was the talk on Reddit that Sam and Robert were not who they say they are. They have no LinkedIn profiles and their twitter accounts look fishy. In some cases, Sam is accused of offering payoff so that stories about Centra could be taken down. The two co-founders created fictional executives profiles with impressive biographies. The price of CTR rose miraculously in the last month of the year. But, it wasn’t until January that an all-high price of more than $4 in January. On day after the co-founders of the token were arrested, the volumes traded shot up to $39 million, up from $6 million the previous day. There is every indication that whale investors and other early investors are dumping their CTRs because of the fracas the company is in.
Recommendation – Should you buy CTR tokens? Probably not. Actually, don’t. Red flag, at least until the dust clears.