The Securities and Exchange Commission has filed charges against a handful of celebrities including Lindsay Lohan, Jake Paul and Ne-Yo for violating laws in touting cryptocurrencies.
On Wednesday, the SEC filed the charges against the celebrities as part of its broader charges filed against the crypto entrepreneur Justin Sun and three of his companies: Tron Foundation Ltd, BitTorrent Foundation Ltd, and Rainberry Inc (formerly BitTorrent) for the unregistered offer and sale of the crypto asset securities Tronix (TRX) and BitTorrent (BTT).
The SEC charged eight celebrities, who also included the rappers Soulja Boy and Lil Yachty, the singers Austin Mahone and Akon, and the adult film star Kendra Lust for “illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation”.
According to the SEC, Sun and his companies offered and sold the crypto asset securities as investments through various unregistered “bounty programs”, which directed “interested parties to promote the tokens on social media, join and recruit others to Tron-affiliated Telegram and Discord channels, and create BitTorrent accounts in exchange for TRX and BTT distributions”.
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” the SEC chair, Gary Gensler, said in a statement.
All mentioned celebrities except for Soulja Boy and Austin Mahone agreed to pay a total of over $400,000 in disgorgement, interest and penalties to settle the charges, without admitting or denying the SEC’s findings.
