On Wednesday, the Securities and Exchange Commission – SEC charges Akon, Jake Paul, Lindsay Lohan, in total eight celebrities with ‘illegally touting’ crypto currencies without disclosing that they were being paid to promote crypto.
The six of the celebrities except Soujla Boy and Mahone agreed to more than $400,000 settlement including fines, without admitting or denying the findings of SEC.
Actor Lindsay Lohan is best known for her role in the film Mean Girls, which got released in 2004. She was paid $10,000 for the promotion of Tronix tokens. On 11th of February, 2021 Lohan tweeted “Exploring #DeFi and already liking $JST, $SUN on $TRX. Super fast and 0 fee. Good job @justinsuntron”. She failed to mention that her tweet was a paid endorsement.
On which the Lohan’s spokesperson said that, “actor was not aware about the disclosure requirement and was contacted in March 2022. She agreed to pay a fine of $30,000 more than what she was paid, to resolve the matter”.
Similarly, Jake Paul who is a YouTuber and also a boxer was paid $25,000 for an endorsement. Paul agreed to pay a fine of $75,000 in the addition of $25,000 he was paid for the promotion of Tronix tokens. Paul’s spokesperson declined to comment.
Other celebrities that agreed to pay includes, Kendra Lust, Akon (singer), Lil Yachty and Ne-Yo (Shaffer Smith.
Justin Sun is a crypto investor. Mr. Sun is well known for having his $4.6 million meal with Warren Buffett. The Securities and Exchange Commission (SEC) announced that Sun engaged in fraud by manipulating the trading activity when it does not exist and failing to disclose paid endorsement with the celebrities.
The SEC Chair Gary Gensler said, “This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure”.
Gurbir Grewar, the director of the SEC’s division said, “As alleged in the complaint, Sun and others used an age – old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those very securities”.
“At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation”.
