The Securities and Exchange Commission has just charged eight celebrities tied to a crypto scheme involving Justin Sun and his companies Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc.
The celebrities involved were charged with promoting cryptocurrencies that were associated with Sun’s companies, “without disclosing that they were compensated for doing so and the amount of their compensation.”
The SEC is charging Lindsay Lohan, Jake Paul, Kendra Lust, and rappers and singers Soulja Boy, Ne-Yo, Lil Yachty, Akon and Austin Mahone.
Gurbir S. Grewal, the director of the SEC’s Division of Enforcement stated, “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.”
So far the SEC has explained that besides Mahone and Souja Boy, the rest of those charged have agreed to paying a penalty of over $400,000, without admitting or denying charges.
Meanwhile, other investors of bankrupt cryptos such as FTX sued the firm’s celebrity endorsers including Tom Brady and Larry David. They alleged that they were defrauding investors through convincing them to invest in FTX while promoting it as being a safe space in crypto.
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