The Securities and Exchange Commission (SEC) has charged eight celebrities with promoting cryptocurrencies without disclosing that they were paid to do so and the amount of their compensation.
Actress Lindsay Lohan, YouTuber Jake Paul, singer-songwriter Austin Mahone, and rapper Soulja Boy (whose legal name is DeAndre Cortez Way) were among those charged for illegally promoting cryptocurrencies Tronix (TRX) and BitTorrent (BTT), the SEC said Wednesday.
The complaint, filed in the US District Court for the Southern District of New York, also named singer-songwriters Ne-Yo (legal name Shaffer Smith) and Akon (legal name Aliaune Thiam), rapper Lil Yachty (legal name Miles Parks McCollum), and pornographic film actress Kendra Lust (legal name Michele Mason).
Simultaneously, the SEC charged crypto entrepreneur Justin Sun and three of his wholly-owned companies with fraud and other securities law violations, including “the unregistered offer and sale” of TRX and BTT.
“As alleged, Sun and his companies not only targeted US investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX,” SEC chair Gary Gensler said.
“Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.”
The SEC said, with the exception of Cortez Way and Mahone, the celebrities charged have agreed to pay a total of more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings.
Contact the author at firstname.lastname@example.org
Follow her on Twitter @emilyjjarvie