Which celebrities face backlash for crypto campaign?
The latest posts on Lindsay Lohan’s Twitter page are Christmas-themed ads from December for “Pilk,” a creamy, bubbly mix of Pepsi and milk. The posts are clearly marked as promotions for Pepsi.
A less celebratory tweet of hers in 2021, in which she promoted a crypto asset without disclosing that she had received payment for the post, has since attracted scrutiny by federal regulators. A spokesperson for Lohan said the actress was unaware of the disclosure requirement and that she agreed to pay a fine after being contacted in March 2022.
The Securities and Exchange Commission on Wednesday announced charges against a group of eight celebrities, including Lohan, influencer Jake Paul and rapper Soulja Boy, for illegally listing crypto-asset securities without disclosing compensation. Six of the stars agreed to pay settlements of up to $400,000.
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Celebrities with good taste won’t necessarily give sound advice on investments, especially if they provide an undisclosed endorsement, said Andrew Verstein, an expert on business law at UCLA.
“The problem is you might get an investment that’s unreasonable or that you don’t understand, or both,” he said.
These celebrities join the growing ranks of famous people under scrutiny for promoting crypto without disclosing financial ties, and of the even more wondrous group of celebrities facing backlash for promoting risky investments to fans.
Who is charged so far?
Justin Sun: An entrepreneur who refers to himself as “His Excellence” on social media, Sun was charged with securities law violations related to his management of three crypto companies.
No household name himself, he hyped his crypto projects — which included the digital coins TRX and BTT — by recruiting celebrity backers, according to the Securities and Exchange Commission.
Lindsay Lohan: “Super fast and 0 fee,” she wrote, using the language of Sun’s company Tron. “Good job @justinsuntron.” She received $10,000 to post about TRX, according to the SEC.
Akon: The “Smack That” singer promoted TRX on social media in exchange for $42,000 worth of crypto. He is also a long-time blockchain enthusiast with his own cryptocurrency, Akoin.
Jake Paul: The social media influencer and boxer was charged with illegally listing Sun’s crypto-asset securities. His brother, Logan Paul, previously promoted Dink Doink, a friend’s cryptocurrency, without disclosing his personal connection. A spokesperson for Jake Paul declined to comment.
Artists Lil Yachty, Soulja Boy, Austin Mahone, Kendra Lust and Ne-Yo have also been charged by the SEC. With the exception of Soulja Boy and Mahone, they broke up.
Who has settled with the SEC in the past?
Kim Kardashian: She posted about a crypto token on her Instagram in 2021. She then paid $1.26 million to settle allegations that she would not be compensated for the post.
Floyd Mayweather: He has backed various specific and often questionable crypto investments. In 2018, he paid more than $600,000 to settle allegations that he had failed to disclose his initial coin offering marketing compensation.
DJ Khaled: The music producer agreed to pay more than $150,000 after the SEC found he had failed to disclose a $50,000 payment from Centra Tech; he had touted it as a “game changer.”
Which other celebrities got in on the blockchain game? (So many!)
Larry David: David, wearing historical costume, promoted FTX last year in a Super Bowl ad that has aged awkwardly.
Matt Damon: The actor shilled for Crypto.com in a “Museum of Bravery.”
Reese Witherspoon: She tweeted “Crypto is here to stay” in December 2021.
Paris Hilton: Naming her retrievers Crypto and Ether, she wrote: “Their names are an ode to my passion and love for #NFTs.”
Ben McKenzie: The teenage heartthrob from “The OC” has become an outspoken critic of crypto. “Don’t take financial advice from celebrities, including me,” he tweeted last year.
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