Lindsay Lohan, Jake Paul & Lil Yachty Among Celebrities Charged In SEC Crypto Case

Lindsay LohanJake Paul, musicians Lil Yachty, Ne-Yo, Soulja Boy, Akon and Austin Mahone and adult film star Kendra Lust were charged Wednesday for illegally promoting the securities of crypto companies being investigated by the SEC.

The commission today charged crypto asset entrepreneur Justin Sun and three of his wholly owned companies for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT). Charges also included fraudulently manipulating the secondary market for TRX through “wash trading” and for orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation.

Lohan, Paul, DeAndre Cortez Way (Soulja Boy), Austin Mahone, Michele Mason (Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo) and Aliaune Thiam (Akon) were charged for “illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation,” the SEC said.

The commission said that all but Soulja Boy and Mahone agreed to pay a total of more than $400,000 in disgorgement, interest and penalties to settle the charges, without admitting or denying the findings of the probe.

After a boom period, crypto has been in retrenchment, especially with the collapse last year of one of the sector’s most dominant firms, FTX. The co-founder and CEO of FTX, Sam Bankman-Fried, has been hit with a range of criminal charges for fraud and other alleged crimes connected with the meltdown of the company. Several well-known crypto pitchmen, among them Larry David, Tom Brady and Steph Curry, were named as defendants in a class-action lawsuit last November, alleging they misled investors by touting crypto exchanges.

The Sun case “demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” SEC chair Gary Gensler said. “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’s complaint was filed in U.S. District Court for the Southern District of New York and detailed the alleged unregistered offers and sales, saying Sun and his companies (Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc.) offered and sold TRX and BTT as investments through multiple unregistered “bounty programs,” which “directed 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.” The SEC also alleges that Sun, his BitTorrent Foundation and Rainberry “offered and sold BTT in unregistered monthly airdrops to investors, including in the United States, who purchased and held TRX in Tron wallets or on participating crypto asset trading platforms.”

(Excerpt) Read more in: Deadline

Lindsay Lohan, Jake Paul & Lil Yachty Among Celebrities Charged In SEC Crypto Case

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