Eight celebrities accused of illegally touting tokens in case involving Chinese crypto entrepreneur Justin Sun.
Published On 23 Mar 202323 Mar 2023
Actress Lindsay Lohan, YouTube influencer Jake Paul and several other celebrities have been charged with illegally promoting the cryptocurrencies of a Chinese entrepreneur accused of fraud.
The United States Securities and Exchange Commission (SEC) said on Wednesday it had charged Justin Sun with artificially inflating the trading volume of Tronix (TRX) and BitTorrent (BTT) and concealing payments made to celebrities to promote the tokens.
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In its complaint filed in court, the SEC said Sun, who owns the companies Tron Foundation, BitTorrent Foundation and Rainberry, directed employees to conduct hundreds of thousands of simultaneous or near-simultaneous purchases and sales of TRX and BTT with no real change in ownership.
The SEC said Sun’s efforts to create the appearance of legitimate trading made it easier to sell TRX while keeping prices stable, generating tens of millions of dollars of illegal profit at the expense of investors.
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” SEC Chair Gary Gensler said in a statement.
Sun did not immediately respond to a request for comment via Twitter.
Lohan, Paul, the rapper Akon, recording artists Ne-Yo and Lil Yachty, and adult actress Michele Mason are alleged to have pushed crypto investments to their millions of online followers without revealing they had been paid.
The six all agreed to pay more than $400,000 in disgorgement, interest and penalties to settle the claims, the SEC said.
Two other celebrities named in the SEC’s complaint, rapper Soulja Boy and pop singer Austin Mahone, did not reach a settlement with the SEC, the agency said.
The SEC issues civil penalties such as fines and does not press criminal charges.
US regulators have stepped up oversight of cryptocurrencies in the wake of the stunning collapse of FTX and the arrest of its founder Sam Bankman-Fried on fraud charges last year.
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FAQs
The Securities and Exchange Commission on Wednesday charged Lindsay Lohan, Jake Paul and several other celebrities with failing to disclose that they were paid to promote crypto. The celebrities agreed to pay $400,000, including fines, and return what they were paid for the promotion.
What celebrities are charged for promoting crypto? ›
Those charged included “Mean Girls” and “Falling for Christmas” star Lindsay Lohan, social media personality and boxer Jake Paul and rapper Soulja Boy, according to an SEC release. p*rn actor Kendra Lust and musicians Lil Yachty, Ne-Yo, Austin Mahone and Akon were also named in the agency's complaint.
Which celebrities are facing backlash for crypto promotion? ›
Lindsay Lohan and Jake Paul are just two names who have encountered legal trouble for pushing crypto on their social media accounts. The most recent posts on Lindsay Lohan's Twitter page are Christmas-themed advertisem*nts from December for “Pilk,” a creamy, bubbly concoction of Pepsi and milk.
What celebrities are sued for endorsing crypto? ›
A class action lawsuit was filed on November 15, 2022, targeting celebrities who endorsed the platform. Some names included in the case are Tom Brady, Stephen Curry, and Larry David. The suit claims that the celebrities endorsing FTX were paid equity stake in the company and should have disclosed that as compensation.
What celebrities are named in the crypto lawsuit? ›
Lawsuits rope in movie stars, sports stars
A group of investors in the failed cryptocurrency exchange FTX named a slew of star endorsers in an action filed in November 2022. They include Larry David, Tom Brady, Giselle Bundchen, Steph Curry, Shaquille O'Neal, Naomi Osaka and others.
Who is the crypto guy that scammed? ›
"Sam Bankman-Fried perpetrated one of the biggest frauds in American history, a multibillion-dollar scheme designed to make him the king of crypto," Damian Williams, U.S. attorney for the Southern District of New York, said in a news briefing following the verdict.
What crypto did Jake Paul promote? ›
Internet personality Jake Paul was sued by the U.S. Securities and Exchange Commission over his alleged illegal promotion of cryptocurrencies tied to Justin Sun. Paul “illegally touted” cryptocurrencies “TRX and/or BTT” without disclosing he was being paid to do so, according to a press release.
Who is the guy going to jail for crypto? ›
Bankman-Fried, 32, sentenced for fraud on customers of the FTX cryptocurrency exchange he founded. Former crypto tycoon Sam Bankman-Fried has been sentenced to 25 years in United States federal prison for stealing $8bn from customers of the now-bankrupt FTX cryptocurrency exchange he founded.
Which female celebrity went to jail? ›
Lori Loughlin, Khloé Kardashian,Blac Chyna and many more ended up in legal trouble, arrested, or even in prison after doing some very questionable things, and we have all the details below.
What actress went to jail? ›
Felicity Huffman spent two weeks in prison following the high-profile Varsity Blues scandal. Huffman pleaded guilty to fraud and conspiracy, after she paid $15,000 to have her daughter's SAT test scores corrected, per PBS News Hour.
At 16 years old, actor Mark Wahlberg went on a drug-fueled rage, seriously injuring two people in the process. He was charged with attempted murder, pleaded guilty to felony assault and was sentenced to two years in jail. However, he only served 45 days.
What celebrities are caught up in the FTX? ›
These celebrity endorsers include supermodel Gisele Bündchen, NBA star Stephen Curry, tennis phenom Naomi Osaka, former baseball superstar David “Big Papi” Ortiz, and Shark Tank's Kevin O'Leary. They are all implicated for appearing in paid advertising campaigns and endorsing the exchange.
What celebrities are involved in the FTX scandal? ›
Why Celebrities Are Facing FTX-Related Lawsuits
- Travis Scott and McDonald's.
- Ryan Reynolds and Mint Mobile.
- Shaquille O'Neal and Papa John's.
- Chrissy Teigen and Blue Apron.
- Eva Longoria and L'Oreal.
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.
Who is the child actor turned crypto billionaire? ›
Brock Jeffrey Pierce (born November 14, 1980) is an American entrepreneur known primarily for his work in the cryptocurrency industry. As a child actor, he starred in the Disney films The Mighty Ducks (1992), D2: The Mighty Ducks (1994), and First Kid (1996).
