Remember when crypto was all the rage? Now celebs who were out here pushing them are getting in T R O U B L E.
The SEC is cracking down on celebrities nefariously pushing crypto on normal people. Lil Yachty, Soulja Boy, Ne-Yo, Akon, Jake Paul, Lindsey Lohan, Austin Mahone, and adult film actress Kendra Lust were all hit with charges by the SEC for illegally promoting cryptocurrency.
According to Pitchfork’s reporting, everyone has agreed to pay a fine of $400K in “disgorgement, interest, and penalties” to settle the charges without admitting or denying the SEC’s findings. Mahone and Soulja Boy have yet to pay the funds.
The SEC also charged crypto pusher Justin Sun and three of his companies—Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent Inc.) for the unregistered offer and sale of Tronix and BitTorrent. Sun is also in trouble for allegedly violating federal securities laws by plotting a scheme to inflate Tronix’s trading volume artificially.
Sun allegedly duped investors into buying Tronix and BitTorrent by using celebrity influencers and throwing them money to promote what the company was offering while telling them not to spill the beans on how much they were receiving in compensation.
Per the SEC:
While we’re neutral about the technologies at issue, we’re anything but neutral when it comes to investor protection. As alleged in the complaint, Sun and others used an age-old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those very securities. At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.
These latest celebs join the likes of T.I. who the SEC hit with a charge in 2020 for pushing bootleg initial coin offerings from a company called FLiK. In 2018, Floyd Mayweather and DJ Khaled felt the SEC’s wrath, with the boxer coughing up over $600K and the music producer having to pay over $150K and agree to not “promote any securities, digital, or otherwise,” for multiple years.
Kim Kardashian also got in trouble for the crypto jig as well and had to come out of her pockets. It was fun, but the SEC is not playing anymore.
Photo: Allen Berezovsky / Getty
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