In yet another crackdown on fraudulent initial coin offerings (ICOs), the U.S. Securities and Exchange Commission (SEC) has charged two co-founders of a startup with organizing a fraudulent ICO that raised over $32 million last year.

The SEC has filed its complaint in federal court in the Southern District of New York.

Sohrab “Sam” Sharma and Robert Farkas are the co-founders of Centra Tech. Inc., a purported financial services startup. In its complaint, the SEC has alleged that Sharma and Farkas masterminded a fraudulent ICO in which Centra offered and sold unregistered investments through a "CTR Token."

The co-founders allegedly claimed that the funds raised in the ICO would be used to build a suite of financial products. They also claimed to offer a debit card backed by Visa and MasterCard allowing users to convert cryptocurrencies into fiat. However, in reality, Centra had no relationships with Visa or MasterCard, the SEC said.

Furthermore, the SEC also alleges that the co-founders created fictional executives, posted false or misleading marketing materials to Centra’s website, and paid celebrities to tout the ICO on social media.

"We allege that Centra sold investors on the promise of new digital technologies by using a sophisticated marketing campaign to spin a web of lies about their supposed partnerships with legitimate businesses,” said Stephanie Avakian, Co-Director of the SEC's Division of Enforcement. “As the complaint alleges, these and other claims were simply false."

Criminal authorities have separately charged and arrested both defendants, according to the press release. The SEC’s complaint charges Sharma and Farkas with violating the anti-fraud and registration provisions of the federal securities laws and seeks permanent injunctions, return of allegedly ill-gotten gains along with interest and penalties, as well as bars against Sharma and Farkas serving as public company officers or directors and from participating in any offering of digital or other securities.