SEC Brings Charges Against Jake Paul for Promoting Cryptocurrency

TRON

The Securities and Exchange Commission has charged Jake Paul, a former YouTuber who is now a professional fighter, along with seven other famous figures. They promoted a digital currency without revealing that they were earning money for doing so, according to documents released on Wednesday.

The legal document stated that Paul shared a tweet on February 12th, 2021, where he endorsed Tronix (TRX) virtual currencies. Tron Foundation Limited, owned by Yuchen "Justin" Sun, publicly offered these securities, as noted in the filing. Paul addressed the tweet to rapper Lil Yachty, who was also charged in the case and used a TRX hashtag with a rocket ship emoji.

As per the SEC, Paul got promoted by accepting crypto assets worth $25,019 in return. During that time, the official document mentioned that Paul had around 3.8 million Twitter followers. Furthermore, Section 17(b) of the Securities Act was mentioned by the SEC, where it stated that anyone who publicizes a security or gives it publicity for consideration received or yet to be received is acting unlawfully.

According to the filing, Paul posted his tweet almost four years after the SEC's Enforcement Division and Office of Compliance Inspections and Examinations released a statement. The statement stated that anyone who is a celebrity or someone who promotes a virtual coin or token that is a security must disclose information such as the type, amount and extent of compensation received for such promotions. If one fails to disclose this data, it will be considered an infringement of federal securities regulations that disallow promotion.

The SEC has taken legal action against Sun and his three firms for vending Tronix (TRX) and BitTorrent (BTT) digital securities without proper registration. Furthermore, the commission asserted that Sun and his companies developed a strategy to pay famous personalities to promote TRX and BTT without disclosing their monetary rewards.

Last month, Paul, who is 26 years old, lost a boxing match against Tommy Fury by a split decision. This was the first time that Paul had ever lost a fight.

Paul became famous because of his videos on Vine, which has shut down. Now, he is well-known on YouTube with over 20 million fans. He also has a great number of followers on Instagram, reaching more than 22 million. Moreover, his Twitter account has gathered around 4.6 million followers.

Besides, SEC charges were brought against Lindsay Lohan, Kendra Lust, Soulja Boy, Austin Mahone, Ne-Yo, and Akon, in addition to Paul and Lil Yachty.

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