Understanding the Charges Against Celebrities for Promoting Crypto

Which Celebrities are Receiving Criticism for Promoting Cryptocurrency?

Lindsay Lohan and Jake Paul are examples of public figures who have faced legal issues for promoting cryptocurrency on their social media profiles.

Lindsay Lohan recently shared some Christmas-inspired ads on her Twitter page featuring "Pilk," a frothy and creamy drink made from a mixture of Pepsi and milk. These promotions are easily recognizable as being connected to Pepsi.

In 2021, she posted a tweet promoting a cryptocurrency, but didn't reveal that she was paid for it. This tweet caught the attention of government regulators, who weren't pleased with the lack of disclosure. A representative of Ms. Lohan has said that she didn't know she had to disclose this information, but after being contacted in March of 2022, she decided to pay a fine.

A group of eight famous individuals, including Ms. Lohan, the influencer Jake Paul, and the rapper Soulja Boy, were charged by the Securities and Exchange Commission on Wednesday for promoting crypto asset securities without revealing their earnings. Six of these celebrities chose to pay $400,000 in total as a settlement.

According to Andrew Verstein, who specializes in business law at the University of California in Los Angeles, just because a celebrity has good taste doesn't mean they can provide trustworthy investment advice. This is especially true if they have undisclosed partnerships or endorsements involved.

According to him, the issue lies in the possibility of receiving an unwise investment or an investment that you lack comprehension of, or maybe even both.

These famous individuals have added themselves to the long list of scrutiny, where they are accused of promoting cryptocurrency without disclosing their financial connections. Furthermore, they join an extensive group of public figures who face criticism for advertising high-risk investments to their supporters.

Lindsay Lohan expressed her satisfaction with the quick and free service provided by Justin Sun's company Tron. She even gave a shout-out to him on social media. It's been reported that she received $10,000 in exchange for promoting TRX. The Securities and Exchange Commission (S.E.C.) is involved in this transaction.

On social media, Akon, the famous singer who sang "Smack That," advertised TRX and received roughly $42,000 worth of cryptocurrency as payment. He is a devoted supporter of the blockchain technology and even has his own cryptocurrency called Akoin.

Jake Paul, a well-known figure on social media as well as a professional boxer, has been accused of illegally promoting Mr. Sun's crypto asset securities. In a similar scenario, Jake's brother, Logan Paul, had previously advertised his friend's cryptocurrency, Dink Doink, without disclosing his own ties to it. When approached for a statement, a representative for Jake Paul refused to comment.

The S.E.C. has accused Lil Yachty, Soulja Boy, Austin Mahone, Kendra Lust and Ne-Yo of wrongdoing. However, only Soulja Boy and Mr. Mahone didn't agree with the accusations and decided to settle the case.

Which individuals or organizations have previously resolved cases with the Securities and Exchange Commission?

In 2021, Kim Kardashian shared information about a cryptocurrency token on her Instagram account. However, it was later discovered that she did not disclose that she was paid to share this information. As a result, she had to pay a settlement of $1.26 million to settle charges.

Floyd Mayweather has given his approval to many different crypto investments that are sometimes questionable. He was held accountable for not disclosing his earnings from promoting initial coin offerings and settled the matter by paying over $600,000 in 2018.

Music producer DJ Khaled agreed to shell out over $150,000 in response to the S.E.C.'s discovery that he neglected to reveal a payment of $50,000 from Centra Tech. He had highly praised the product as a significant advancement in the industry.

Which other celebrities have entered the blockchain game? (There are quite a few!)

Last year, Larry David was featured in a Super Bowl ad for FTX, where he was dressed in historical clothing to promote the cryptocurrency exchange. However, the commercial hasn't aged well and now seems out of place.

Matt Damon promoted Crypto.com in a display highlighting courageous endeavors known as the "Museum of Bravery."

In December 2021, Reese Witherspoon posted on her social media account saying that cryptocurrency is here to stay.

Paris Hilton has given her lap dogs the names Crypto and Ether. She explained that their names are a tribute to her intense fondness and adoration for NFTs.

Ben McKenzie, who was popular with teenage fans in the 2000s for his role in the show "The O.C.", has recently spoken out against cryptocurrency. He advised his followers not to take financial advice from famous people, including himself, on social media last year.