The Securities and Exchange Commission (SEC) today announced charges against eight celebrities for “illegally promoting TRX and/or BTT without disclosing that they were compensated for it and the quantity of their compensation.”
Lindsay Lohan, Jake Paul, Akon, Lil Yachty and adult film star Kendra Lust were amongst the massive names who agreed to pay a $400,000 settlement for his or her involvement within the shady code name.
None of them pleaded guilty.
The allegations were a part of a wider investigation into cryptocurrency entrepreneur Justin Sun and his firms, Tronix (TRX) and BitTorrent (BTT).
Related: What’s happening in Crypto, what happened to FTX and what does it mean for Web3?
Wash the trade
According to a grievance filed in a New York federal court, Sun violated securities law by offering cryptocurrencies that weren’t properly registered. Sun has also engaged in “wash trading,” which in accordance with the SEC, “involves the simultaneous or near-simultaneous purchase and sale of a security to make it seem like actively trading without an actual change of helpful owner.”
According to the SEC, between April 2018 and February 2019, Sun had its employees “engage in greater than 600,000 TRX exchange transactions between two cryptocurrency trading platform accounts under its control.”
Illegal promotion of celebrities
Sun also paid celebrities reminiscent of Paul and Lohan to advertise its unregistered crypto offerings, “while expressly mandating that they not disclose their remuneration,” the SEC said in a press release.
“This is precisely what the federal securities laws were designed to guard against,” said Gurbir S. Grewal, director of the SEC’s Executive Division.
But Lohan’s spokesman Variety said“Lindsay was contacted in March 2022 and was unaware of the disclosure requirement. She agreed to pay the effective to settle the matter.”
The collapse of Sun’s crypto empire is the most recent bad news for crypto investors and the celebrities who back them.
Tom Brady and Kevin O’Leary were among the many high-profile names involved within the FTX scandal, reportedly losing quite a lot of money because of the financial disaster of the cryptocurrency exchange. They weren’t charged with any crimes.
