SEC Fines Lindsay Lohan, Jake Paul, Lil Yachty, More Over Crypto Promotions
The Securities and Exchange Commission (SEC) is charging celebrities—including actress Lindsay Lohan, YouTube personality Jake Paul, and rapper Lil Yachty—for allegedly helping an entrepreneur pump up his cryptocurrencies.
The celebrities, which also include rapper Souja Boy and singer Ne-Yo, received payments from business executive Justin Sun, the founder of the Tron cryptocurrency. In return, they touted Tron and the BitTorrent Token on social media, including Twitter, the SEC says.
The problem is that none of the celebrities disclosed to the public that they had been paid to promote the cryptocurrencies, which is a violation of federal securities law, the SEC adds. “Thus, the public was misled into believing that these celebrities had unbiased interest in TRX and BTT, and were not merely paid spokespersons,” the SEC says in a lawsuit.
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” adds SEC Chair Gary Gensler.
In total, eight celebs were charged. But six of them—including Lohan, Paul and Lil Yachty—have already “agreed to pay a total of more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings,” the US regulator says.
The two remaining celebrities, Souja Boy and singer Austin Mahone, appear to be resisting giving up their payments. On Wednesday, the SEC filed a lawsuit(Opens in a new window) demanding a US court force both celebrities, along with Sun, to give up all their ill-gotten gains.
The SEC alleges Sun began paying celebrities for their endorsements starting in January 2021. Souja Boy was paid $10,000 for his tweets to promote Tron on Twitter
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