Lindsay Lohan, Jake Paul and Ne-yo are among a string of celebs charged by the SEC over cryptocurrency endorsement deals.
The Security and Exchange Commission, the US federal financial regulator, has accused a whole host of celebrities of flouting rules around selling crypto currencies to their followers on social media.
In total, eight stars were included in the array of charges including rappers Soulja Boy, Lil Yachty, musicians Austin Mahone and Akon and the adult movie star Kendra Lust along with the ‘Parent Trap’ star, the YouTuber and the music producer.
They have been hit with allegations that they “illegally touted” crypto “without disclosing they were compensated for doing so and the amount for their compensation”.
The indictment comes as a part of a wider investigation and charges aagainst Justin Sun and three of his businesses - Tron Foundation Ltd, BitTorrent Foundation Ltd and Rainberry Inc (which used to be known as BitTorrent) - surrounding the unverified offer and sale of the crypto asset securities firms, TRX and BTT.
The SEC believe that Justin and his various enterprises traded the crypto assets via “bounty programs” that led to “interested parties to promote the tokens on social media, join and recruit others to Tron-affiliated Telegram and Discord channels, and create BitTorrent accounts in exchange for TRX and BTT distributions”.
Gary Gensler, the SEC chair said: “This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure.”
All the celebrities - bar Soulja Boy and Austin Mahone - accepted to fork out more than $400,000 in restitution, interest and penalties to squash the allegations, without confirming or denying the SEC’s charges.
