Lindsay Lohan and Jake Paul accused by SEC of crypto scheme
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Actress Lindsay Lohan is among eight celebrities who US regulators say failed to disclose they were paid to promote cryptocurrency
Eight celebrities, including Lindsay Lohan and Jake Paul, have been charged by US regulators with participating in an illegal crypto scheme.
The famous group allegedly used their social platforms to boost two crypto tokens without disclosing that they were paid to promote them.
The charges were announced by the US Securities and Exchange Commission (SEC) in a press release on Wednesday.
Lohan and Paul have paid to settle the charges without admitting guilt.
The other celebrities charged are:
- DeAndre Cortez Way, the musician known as Soulja Boy
- Singer Austin Mahone
- Porn actress Michele Mason, aka Kendra Lust
- Miles Parks McCollum, aka rapper Lil Yachty
- Musician Shaffer Smith, known professionally as Ne-Yo
- Senegalese-American singer Aliaune Thiam aka Akon
The group is accused of illegally promoting TRX and BTT crypto-assets “without disclosing that they were compensated for doing so and the amount of their compensation,” the SEC said.
Justin Sun, a crypto investor and diplomat for the Caribbean island nation of Grenada, is also accused of fraud by manipulating the trading activity of the two tokens to make it appear as if they were being actively traded in a crime known as “laundering”. .
Mr Sun, a Chinese-born protégé of Alibaba founder Jack Ma, is known to have paid $4.6m (£3.7m) to dine with investor Warren Buffett.
He is accused of “orchestrating an advertising campaign in which he and his celebrity promoters concealed the fact that the celebrities were paid for their tweets,” the SEC added in its news release.
His companies – Tron Foundation Limited, BitTorrent Foundation Ltd. and Rainberry Inc. (formerly BitTorrent) – are also charged as part of the scheme.
“This case demonstrates once again the high risk investors face when crypto-asset securities are offered and sold without proper disclosure,” SEC Chairman Gary Gensler said.
“Sun and his companies not only targeted US investors in their unregistered offers and sales, generating millions in illegal income at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading,” said Mr Gensler added.
All the celebrities, apart from Mr Cortez Way (Akon) and Mr Mahone, have paid a combined total of more than $400,000 to settle the allegations.
