SEC Charges Lindsay Lohan, Jake Paul, Soulja Boy, Akon in Crypto Promotion Scheme
Top line
The Securities and Exchange Commission on Wednesday announced charges against actress Lindsay Lohan, boxer Jake Paul and a group of rappers and R&B stars, including Soulja Boy, Akon and Lil Yachty, for allegedly promoting cryptocurrencies without disclosing the fact that they were paid to do it. .
Keywords
As part of an ongoing crackdown on entertainers who support crypto without disclosing it to fans, the SEC charged eight celebrities, including DeAndre Cortez Way, better known as rapper Soulja Boy, as well as porn star Kendra Lust (whose real name is Michele Mason), Akon (Aliaune Thiam), Shaffer Smith (Ne-Yo) and Miles Parks McCollum (Lil Yachty), for violating federal securities laws by illegally claiming the cryptocurrencies Tronix (TRX) and BitTorrent (BTT) without disclosing the fact that they were compensated for it.
The celebrities promoted the cryptocurrencies to their thousands of followers on Twitter, with Lohan writing “super fast and 0 fee”, Thiam tweeting, “heard a lot about #TRX” and Smith tweeting: “What is an ideal crypto wallet? Thinking $TRX.”
The SEC also brought charges Wednesday against the owner of celebrity-paying crypto companies Tron Foundation Limited and BitTorrent, Justin Sun, for allegedly manipulating the trading volume of crypto tokens TRX and BTT by directing employees to buy and sell the tokens through a process called wash trading.
According to the complaint, filed in federal district court in New York, Sun and his associates also offered and sold BTT and TRX as investments, directing buyers to promote the crypto tokens on social media, join social media channels on Discord and Telegram associated with Tron and create BitTorrent accounts.
Six of the eight celebrities charged agreed to pay a total of more than $400,000 to settle those charges, with the exception of Cortez Way and singer Austin Mahone.
Key background
The eight celebrities are the latest to face charges related to the marketing of cryptocurrencies. Last October, fashion icon Kim Kardashian agreed to pay $1.26 million to settle SEC charges for promoting the EthereumMax cryptocurrency without saying she had been paid to promote it. Last month, former NBA star and ESPN commentator Paul Pierce agreed to a $1.4 million fine to settle SEC charges that he promoted EthereumMax on Twitter without saying he was compensated for those tweets.
Big number
600,000. That’s how many so-called wash trades of TRX that Sun had its employees perform between April 2018 and February 2019, trading an estimated 4.5 to 7.4 million TRX every day. By selling TRX to the secondary market, the SEC alleges Sun also made $31 million in revenue through unregistered offerings and sales.
Further reading
Former Celtics star Paul Pierce to pay $1.4 settlement to promote EthereumMax Crypto on Twitter (Forbes)
Kim Kardashian agrees to pay $1.26 million to settle SEC cryptocurrency campaign fee (Forbes)
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