Along with Jake Paul, Soulja Boy, Ne-Yo
By City News Service
Lindsay Lohan, Jake Paul and six other celebrities have been charged with violating investor-protection laws by allegedly promoting cryptocurrencies without disclosing they were being paid for doing so, the U.S. Securities and Exchange Commission announced this week.
Lohan and Paul were charged along with singers Austin Mahone and Akon, rappers Soulja Boy and Lil Yachty, singer-songwriter Ne-Yo, and adult film actress Kendra Lust in the Southern District of New York, according to the SEC.
The SEC’s complaint alleges that crypto asset entrepreneur Justin Sun orchestrated “a scheme to pay celebrities” to tout his crypto asset securities Tronix and BitTorrent without disclosing their compensation. The commission alleges the eight celebrities were part of the scheme.
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” SEC Chair Gary Gensler said in a statement.
“As alleged, Sun and his companies not only targeted U.S. 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. 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.”
With the exception of Soulja Boy and Mahone, the celebrities 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, regulators said.