Federal officials have filed charges against eight celebrities, including actor Lindsay Lohan, influencer Jake Paul, and musician Soulja Boy, for illegally promoting two cryptocurrencies without disclosing they were paid to do so. Both Tronix (TRX) and BitTorrent (BTT) were sold by crypto entrepreneur Justin Sun, who was also accused by the SEC on Wednesday.
Who is Lindsay Lohan?
Lindsay Lohan, an American actress and singer, has been in the spotlight since since she began her career as a child model and performer. Lohan became a teen icon when her films did well financially and garnered positive reviews. After a string of arrests and court appearances, Lohan became a public figure. She was finally released from probation after eight years of legal trouble in 2013. Her troubled family background and recorded personal relationships have received as much attention as her legal troubles and drug concerns, including her many court-mandated stays in recovery.
SEC charges Lindsay Lohan illegally promoting crypto
Both Tronix (TRX) and BitTorrent (BTT) were sold by crypto entrepreneur Justin Sun, who was also accused by the SEC on Wednesday.
The allegations against Sun and three of his wholly-owned companies are that they engaged in “wash trading,” in which they rapidly bought and sold cryptocurrencies to give the appearance that they were actively traded on the secondary market, and that they engaged in the unregistered offer and sale of crypto asset securities.
Source: CNN
The SEC further alleges that Sun and the firms enlisted the help of celebrities with large social media followings to promote TRX and BTT, and that they were compensated for their efforts but were instructed to keep their earnings secret.
“This prosecution highlights again the tremendous risk investors face when crypto asset securities are issued and sold without sufficient disclosure,” said SEC head Gary Gensler in a statement.
Everyone on the list of eight has been accused of unlawfully promoting one or both of the securities.
Without admitting or contesting the SEC’s findings, six celebrities have agreed to pay more than $400,000 to resolve the accusations. Soulja Boy (real name: DeAndre Cortez Way) and Mahone are not included in the settlement.
NPR requested comments from the celebrities’ agents but only received responses from two of the eight. Jake Paul’s camp has officially shut out the press.
In the wake of crypto’s spectacular ascent to fame, a slew of celebrities began endorsing various digital currencies. But, regulators’ interest in ferreting illicit conduct in the crypto market has resulted in legal difficulties for several of these celebrities.
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