Lindsay Lohan, Jake Paul, Ne-Yo and rapper Lil Yachty are among eight notable names hit with Securities and Exchange Commission charges for violating securities laws in their use of cryptocurrencies.
The SEC revealed on Wednesday that it has filed charges against eight celebrities in connection with its extensive investigation into crypto entrepreneur Justin Sun and three of his companies: Tron Foundation Limited, BitTorrent Foundation Ltd. and Rainberry Inc.. brand names Tronix (TRX) and BitTorrent (BTT).
According to the SEC, the eight bold-faced names were charged with “illegally speaking to TRX and/or PDT without disclosing that they received compensation for doing so and the amount of their compensation.”
The list also includes rapper Soulja Boy, singers Austin Mahone and Akon, and adult film star Kendra Lust. All but Mahone and Soulja Boy (DeAndre Cortez Way) have reached settlements with the SEC. That includes “disgorgement, interest and penalties in excess of $400,000 to settle charges,” according to the SEC.
“This case demonstrates once again the high risks investors face when crypto asset securities are issued and sold,” SEC Chairman Gary Gensler said. As alleged, Sun and his companies not only targeted American investors in their unregistered offers and sales, making millions in illegal income at the expense of investors, but also coordinated wash trading on an unregistered trading platform to create the false appearance of active trading. In TRX. Sun also persuaded investors to buy TRX and PTD, in which he and his celebrity promoters orchestrated an advertising campaign that concealed the fact that celebrities were paid for their tweets.
The SEC complaint, filed in federal court for the Southern District of New York, alleges that Sun instructed eight celebrities not to publish on social media platforms for talking about TRX and BTT assets.
Logan’s rep said The actor is not aware of any disclosure obligations.
“Lindsey was contacted in March 2022 and was unaware of the disclosure requirement. “He agreed to pay a fine to resolve the issue,” spokeswoman Leslie Sloan said.
Sun is accused of taking several steps to manipulate the market for those coins through “wash trading” without an actual change in beneficial ownership.” According to the SEC, from April 2018 to February 2019, Sun “directed his employees to transfer over 600,000 TRX between two crypto asset trading platform accounts he controlled. allegedly instructed to engage in more wash trades”. According to the SEC, Sun made $31 million in secondary market sales of illegal and unregistered sales of the token.
“While we are neutral about the technologies at issue, we are neutral when it comes to investor protection,” said Gurbir S., director of the SEC’s Division of Enforcement. Grewal said. “As the complaint alleges, Sun and others used the old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements. At the same time, Sun paid celebrities with millions of social media followers to talk about unregistered offerings while they disclosed their compensation. It specifically advised not to. Regardless of the labels used by Sun et al., this is the very conduct that the federal securities laws were designed to protect.
(Pictured: Lindsay Lohan, Jake Paul and Lil Yachty)