SEC charges Lindsay Lohan, Jake Paul over a crypto-scheme
US regulators charged eight celebrities including Lindsay Lohan, Jake Paul and Jake Evans with participation in an illegal cryptocurrency scheme.
Stars are alleged to have used social media to promote two crypto tokens, without disclosing their financial compensation.
The US Securities and Exchange Commission (SEC), announced the charges in a news release On Wednesday
Paul and Lohan agreed to pay the settlement without admitting guilt.
Other celebs who were charged include:
Musician Soulja Boy (DeAndre Cortez Way)
Singer Austin Mahone
Kendra Lust (Michele Mason), porn actor
Rapper Lil Yachty (Miles Parks McCollum).
Musician Ne Yo (ShafferSmith)
Senegalese-American singer Aliaune Thiam, (Akon).
According to the SEC, the group was accused of illegally marketing TRX and BTT crypto assets without disclosing that they were compensated and the amount of their compensation.
Justin Sun, a cryptocurrency investor and diplomat for Grenada is also being accused of fraud. He manipulated the trading activity of two tokens to make them appear active in a crime called “wash trading”.
Mr Sun, a Chinese-born protégé of Alibaba founder Jack Ma, is known for having once paid $4.6m (£3.7m) to have dinner with investor Warren Buffett.
He was accused of “organizing and promoting a campaign in which he, his celebrity promoters concealed the fact that celebrities were being paid for their tweet”, according to the SEC’s news release.
As part of the scheme, his companies – Tron Foundation Limited and BitTorrent Foundation Ltd – were also charged.
Gary Gensler (SEC Chair) stated, “This case again demonstrates the high risk investors face whenever crypto asset securities are offered or sold without proper disclosure.”
Sun and his companies targeted US investors with their unregistered sales and offers, generating millions of illegal proceeds at the expense investors. They also coordinated wash trading on an unsregistered trading platform to give the appearance of active trading.
Apart from Soulja Boy or Mahone, the total settlement amount for all celebrities was more than $400,000
Lohan, best known for her role on the 2004 film Mean Girls had 8.4 million followers on Twitter when she posted a message urging her followers to make an investment.
The actress, 36, was charged with being a resident in Dubai in the United Arab Emirates. She has paid $10,000 to SEC and $30,000 more in penalties.
Paul, a YouTuber and boxer, was required to pay more that $100,000