The US Securities and Exchange Commission has charged two men with orchestrating a fraudulent initial coin offering that raised more than $32 million from thousands of investors last year.

The SEC alleges that Sohrab Sharma and Robert Farkas, co-founders of Centra Tech Inc, which claims to be a Delaware corporation headquartered in Miami Beach, masterminded a fraudulent ICO in which Centra offered and sold unregistered investments through a so-called 'CTR Token.' The website says: "CTR Tokens are a decentralised currency built on the Ethereum network, which is ERC20 compliant. Users must have CTR Tokens to take advantage of the Centra Ecosystem and its product line." Centra ceased to raise funds around 1 October last year.

Sharma and Farkas allegedly claimed that funds raised in the ICO would help them to build up a suite of financial products. They claimed, for example, to offer a debit card backed by Visa and MasterCard that would allow users to convert illiquid cryptocurrencies into US dollars or other legal tender instantly. Actually, the SEC alleges, Centra had no relationships with Visa or MasterCard. The SEC also says that to promote the ICO, Sharma and Farkas created fictional executives with impressive biographies, posted misleading marketing materials on Centra’s website, and paid celebrities including the popular rapper DJ Khaled to tout the ICO on social media.

The SEC has charged them with breaking the anti-fraud and registration provisions of the federal securities laws. It has lodged its complaint in a federal court in the Southern District of New York. In January it shut down AriseBank, another ICO. AriseBank was was endorsed by boxing legend Evander Holyfield.

Police have arrested both men on other charges. According to the complaint, Farkas made reservations to leave the country by aeroplane, but was arrested before he was able to board his flight.

In November, Business Insider quoted Allan Shutt, Centra's general counsel, as saying: "I truly believe that the product will be developed in the near future. The money is not in jeopardy. It's certainly not a scam."