Lindsay Lohan and Jake Paul Charged for Promoting Cryptocurrency as Celebrities
A group of eight famous personalities have been charged with endorsing tokens without legal authorization in a legal affair that encompasses a Chinese cryptocurrency businessman with the name of Justin Sun.
A Chinese entrepreneur who is under suspicion for engaging in fraud has reportedly compelled actress Lindsay Lohan, Youtube content creator Jake Paul, and multiple other well-known figures to promote his cryptocurrencies illegally.
On Wednesday, the SEC accused Justin Sun of increasing the trading volume of Tronix and BitTorrent by fraudulent means, as well as hiding payments to celebs who promoted the tokens.
The SEC submitted a complaint in court alleging that Sun, the owner of Tron Foundation, BitTorrent Foundation, and Rainberry instructed his employees to carry out a large number of purchases and sales of TRX and BTT at the same time or almost the same time without actually changing ownership.
According to the Securities and Exchange Commission (SEC), Sun's actions aimed at portraying TRX trading as legitimate facilitated the sale of the cryptocurrency while maintaining price stability. However, this resulted in illegal profits worth tens of millions of dollars at the detriment of investors.
SEC Chair Gary Gensler stated that this instance is another instance that showcases the immense danger that investors are susceptible to when they are presented with crypto asset securities without adequate transparency.
No response was received from Sun after requesting a comment through Twitter.
Lohan, Paul, the rapper Akon, recording artists Ne-Yo and Lil Yachty, and adult actress Michele Mason have been accused of promoting cryptocurrency investments to their millions of online fans without disclosing they received payment.
According to the SEC, all six parties have come to an agreement to pay a sum greater than $400,000 to settle the accusations. This amount includes disgorgement, interest, and penalties.
The SEC reported that the agency did not come to an agreement with rapper Soulja Boy and pop singer Austin Mahone, who were both mentioned in the agency's complaint, unlike the other celebrities.
The SEC imposes financial penalties such as monetary fines and refrains from pursuing criminal prosecution.
Following the shocking collapse of FTX and the subsequent arrest of its founder Sam Bankman-Fried on charges of fraud, US regulators have taken a more vigilant stance on monitoring cryptocurrencies.
Al Jazeera along with other news agencies
