ISLAMABAD/NEW YORK: US authorities have accused eight celebrities, including Lindsay Lohan and Jake Paul, of promoting two cryptocurrencies without disclosing that they were being paid (for it).
The celebrities have been accused of promoting two cryptocurrency tokens on their social media accounts without disclosing that they were being paid for. The US Securities and Exchange Commission (SEC) has levelled allegations against the eight celebrities.
According to the SEC, the celebs improperly promoted the TRX and BTT cryptocurrency assets “without disclosing that they were compensated for doing so and the amount of their remuneration.”
Paul and Lohan have, however, paid to settle the allegations without admitting guilt. The other celebrities accused of illegally promoting cryptocurrency are musician Soulja Boy, singer Austin Mahone (DeAndre Cortez Way), porn actress Kendra Lust (Michele Mason), Senegalese-American singer Aliaune Thiam (Akon), musician Ne-Yo (Shaffer Smith), rapper Lil Yachty (Miles Parks McCollum).
In a crime known as “wash trading,” Justin Sun, a crypto investor and ambassador for the Caribbean Island nation of Grenada, has also been charged with fraud for allegedly altering the trading activity of the two tokens to make it appear as though they were being traded frequently.
Sun, a protégé of Alibaba CEO Jack Ma, who was born in China, is well-known for having previously paid $4.6 million (£3.7 million) to have dinner with financier Warren Buffett.
He was accused of “orchestrating a promotional campaign in which he and his celebrity promoters concealed the fact that the celebrities were paid for their tweet,” the SEC said. He is also accused of participating in the plan through his firms, Tron Foundation Ltd, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent).
“This prosecution again shows the tremendous risk investors confront when crypto asset securities are offered and sold without sufficient disclosure,” stated SEC Chair Gary Gensler.
Sun and his businesses used unregistered offers and sales to defraud American investors out of millions of dollars and coordinated wash trading on an unregulated trading platform to provide the impression of busy trading. Besides Soulja Boy and Mahone, all celebrities have paid more than $400,000 to settle the charges.
When Lohan tweeted a message asking her fans to contribute, she had 8.4 million Twitter followers and was best recognized for her part in the 2004 movie Mean Girls.
The 36-year-old actress paid $10,000 to the SEC and an additional $30,000 in penalties. According to the charging paperwork, she resides in Dubai, United Arab Emirates. Paul, a Puerto Rican boxer and YouTuber, was made to pay more than $100,000.
