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Lindsay Lohan, Lil Yachty, Jake Paul Among 8 Celebrities Hit With SEC Charges for Touting Crypto

Lindsay Lohan, Jake Paul, Ne-Yo and rapper Lil Yachty are among the eight notable names who have been hit with Securities and Exchange Commission charges for violating securities laws in touting crypto currencies.

The SEC on Wednesday disclosed that charges were filed against eight celebrities in connection with the broader investigation of crypto entrepreneur Justin Sun and three of his companies: Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc., which marketed crypto asset securities under the brand names Tronix (TRX) and BitTorrent (BTT).

The eight boldface names were charged with “illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation,” according to the SEC.

The list also includes rapper Soulja Boy, singers Austin Mahone and Akon and adult film star Kendra Lust. All but Mahone and Soulja Boy (aka DeAndre Cortez Way) have reached settlements with the SEC that involve “more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings,” per the SEC.

“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” said SEC chair Gary Gensler. “As alleged, Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX. Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.”

The SEC complaint, filed in New York’s Southern District federal court, accuses Sun of instructing the eight celebrities to not disclose that they were being paid to tout TRX and BTT assets on social media platforms.

A representative for Lohan said the actor was unaware of any disclosure obligations.

“Lindsay was contacted in March 2022 and was unaware of the disclosure requirement. She agreed to pay a fine to resolve the matter,” said spokeswoman Leslie Sloane.

Sun is accused of taking numerous steps to manipulate the market for those currencies through “wash trading,” which is explained by the SEC as a process that “involves the simultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership.” From April 2018 to February 2019, Sun engaged “allegedly directed his employees to engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled,” according to the SEC. Sun also generated $31 million in proceeds through secondary market sales of illegal and unregistered sales of the token, per the SEC.

“While we’re neutral about the technologies at issue, we’re anything but neutral when it comes to investor protection,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement. “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. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”

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by Anonymousreply 13March 25, 2023 4:19 PM

What about Mayor Eric Adams, who once claimed he wanted municipal employee paychecks to be paid in cryptocurrency? Boy, he shut up quickly about crypto after that.

I’m looking at this list and thinking these people were chosen to sell this garbage to a certain demographic. Why?

by Anonymousreply 1March 23, 2023 11:06 AM

[quote]I’m looking at this list and thinking these people were chosen to sell this garbage to a certain demographic. Why?

Celebs will do anything for more money, what else. See also Matt Damon and Larry David.

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by Anonymousreply 2March 23, 2023 11:11 AM

[quote] Lindsay Lohan, Lil Yachty, Jake Paul

These are exactly the kind of people I'd seek financial advice from.

by Anonymousreply 3March 23, 2023 11:59 AM

Ii feel variety new what they were doing by putting Lindsay Lohan next to the someone that sounds like little yacht.

by Anonymousreply 4March 23, 2023 12:20 PM

If you can't trust Lil Yachty for financial advice, who can you trust??

by Anonymousreply 5March 23, 2023 1:44 PM

Just the sort of class acts you’d expect to do this kind of thing. Crazier to think that people would value their word on investing.

by Anonymousreply 6March 23, 2023 2:17 PM

Damn, Lohan is sketchy enough to join the BRF.

by Anonymousreply 7March 23, 2023 2:47 PM

[quote] Just the sort of class acts you’d expect to do this kind of thing. Crazier to think that people would value their word on investing.

The masses do. These are people with no discernible training, talent or skill who live in opulence. Everyone wants to get rich quick for doing nothing and these are the folks who can tell you how.

by Anonymousreply 8March 23, 2023 2:56 PM

Something tells me Austin Mahone can’t afford $400,000. But I’m sure he could give his bussy/dick up to a billionaire.

by Anonymousreply 9March 25, 2023 3:32 PM

One can pay for fire-crotch with crypto. Who knew.

by Anonymousreply 10March 25, 2023 3:36 PM

R1 because the shills are greedy and their marks are stupid.

A tale as old as time.

by Anonymousreply 11March 25, 2023 3:51 PM

This is what the SEC is prioritizing? I get that the paid endorsements should have been disclosed, but it’s not like any of them were hired because of their reputations as financial gurus. This is a stupid.

by Anonymousreply 12March 25, 2023 4:11 PM

Why not, R12? They’re low hanging fruit easily busted because not only were they guilty, they’re useful as a warning not just to other influencers but to the sheep they influence. Catching and fining John Q Public in Nebraska doesn’t have the same impact on deterring others that busting Lindsay L does.

There are other people committing other crimes. They go after them, too.

by Anonymousreply 13March 25, 2023 4:19 PM
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