Lindsay Lohan, other celebs settle with SEC over crypto case
Actress Lindsay Lohan appears at the Christian Siriano Fall/Winter 2023 fashion show in New York on February 9, 2023. The SEC said Lohan, rapper Akon and several other celebrities have agreed to pay tens of thousands of dollars to settle claims they promoted crypto investments without disclosing that they were paid to do so. (Photo by Charles Sykes/Invision/AP, File)
Actress Lindsay Lohan, rapper Akon and several other celebrities have agreed to pay tens of thousands of dollars to settle allegations that they promoted crypto investments to their millions of social media followers without disclosing that they were paid to do so.
Lohan, Akon, recording artists Ne-Yo, and Lil Yachty, boxer and Internet personality Jake Paul, and adult film actress Michele Mason all agreed to pay more than $400,000 combined in disgorgement, interest and penalties to settle the claims, Securities and Exchange The commission said so on Wednesday.
No one admitted or denied the SEC’s findings as part of the settlement. Two other celebrities named in the SEC’s complaint, rapper Soulja Boy and pop singer Austin Mahone, did not reach a settlement with the SEC, the agency said.
In response to a request for comment, Lohan’s publicist Leslie Sloane said the actress was contacted in March 2022, was unaware of the disclosure requirement and agreed to pay a fine to settle the matter. Lohan, who announced last week that she is pregnant, was ordered to forfeit the $10,000 she was paid, plus interest, and pay a $30,000 fine, according to an SEC complaint.
A spokeswoman for Paul declined to comment. Emails left with representatives for the other celebrities named in the SEC complaint were not immediately returned Wednesday.
In the complaint filed by the SEC in federal court in New York, the agency alleges that the celebrities were paid to promote Tronix (TRX) and BitTorrent (BTT), both crypto-asset securities offered for sale by three companies owned by Justin Sun, a Chinese national . Sun is the Permanent Representative of Grenada to the World Trade Organization and may live in Singapore or Hong Kong, according to the complaint.
Beginning around August 2017, Sun allegedly offered to sell billions in the unregistered securities and engaged in manipulative trading, while also creating secondary markets in which Tronix and BitTorrent could be traded, according to the complaint.
“Although the celebrities were paid to promote TRX and BTT, their social media touts did not disclose that they had been paid or the amounts of their payments,” according to the complaint. “Thus, the public was misled into believing that these celebrities had an objective interest in TRX and BTT, and were not just paid spokespersons.”
Many celebrities and athletes have used their influence and massive social media following to promote cryptocurrencies in recent years, including Matt Damon, Tom Brady and Reese Witherspoon. But doing so without disclosing when they are being paid to do so is illegal, and has landed some big names in hot water with securities regulators. Last fall, Kim Kardashian agreed to pay a $1 million fine to settle federal charges that she recommended Ethereum Max tokens, a cryptocurrency, to her millions of Instagram followers without making it clear she was being paid to do so the.
In 2020, actor Steven Seagal agreed to pay more than $300,000 as part of a similar settlement with the SEC, which also banned him from promoting investments for three years.
Alex Veiga is an AP Business Writer.
Entertainment writer Andrew Dalton contributed to this report.
