Lindsay Lohan, Jake Paul & Other Celebrities Charged By SEC For Illegally Promoting Crypto
The Securities and Exchange Commission (SEC) charged a number of celebrities with civil penalties on Wednesday for illegally promoting cryptocurrency “without disclosing that they were compensated for doing so and the amount of their compensation.”
The celebrities charged for the alleged unlawful promotions include actress Lindsay Lohan, YouTuber Jake Paul, singer Akon, Rapper Lil Yachty, Grammy-winning artist Ne-Yo, and 26-year-old singer Austin Mahone.
According to the SEC’s press release, most of the celebrities have agreed to pay over $400,000 “in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings.”
Lohan had received $10,000 for promoting Tronix tokens (TRX) on her Twitter account for crypto entrepreneur Justin Sun. Similarly, Paul received $25,000 worth of crypto assets in exchange for promoting TRX on Twitter.
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The SEC has also charged Sun and his three companies – Tron Foundation Limited, BitTorrent Foundation Ltd. and Rainberry Inc. (formerly BitTorrent) – with securities fraud for “manipulating the secondary market for TRX through extensive wash trading, which involves the simultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership, and for orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation.”
The SEC claims Sun to have generated a profit of $31 million “from illegal, unregistered offers and sales of the token.” Representatives for Sun and his companies have not commented on the charges made against him.
This is not the first time the SEC has charged major celebrities for illegally promoting crypto. Just last year the SEC charged Kim Kardashian for failing to disclose her $250,000 compensation for sharing an Instagram post promoting a cryptocurrency asset. The reality star settled the charges and agreed to pay $1.26 million in fines without admitting or denying the SEC’s findings.
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