Charges in crypto scheme against Lindsay Lohan, Jake Paul, and Soulja Boy
Ne-Yo, Akon, Lil Yachty, and Austin Mahone were also charged by the Securities and Exchange Commission in the case, which is tied to the promotion of crypto tokens created by Justin Sun.
Eight well-known celebrities were accused by the Securities and Exchange Commission of participating in a cryptocurrency scheme run by Justin Sun through his businesses Rainberry Inc., BitTorrent Foundation Ltd., and Tron Foundation Limited.
The celebrities were accused of promoting the digital currencies linked to Sun’s businesses “without revealing that they were compensated for doing so and the amount of their compensation.”
Actress Lindsay Lohan, influencer and boxer Jake Paul, adult film star Kendra Lust, rappers Soulja Boy, Ne-Yo, Lil Yachty, Akon, and singer Austin Mahone are among those facing charges, according to the SEC.
“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,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement. “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.”
Except for Mahone and Soulja Boy (actual name DeAndre Cortez Way), according to the SEC, the celebrities have agreed to pay a fine of more than $400,000 without admitting or rejecting the allegations.
In recent months, celebrity cryptocurrency endorsements have been a contentious legal topic. For her role in promoting the EMA token, Kim Kardashian settled to a $1.2 million settlement last year.
In the meantime, investors in the defunct cryptocurrency exchange FTX sued its celebrity backers, including Tom Brady and Larry David, claiming that they had effectively defrauded them by persuading them to invest in FTX and praising it as a secure location within the crypto ecosystem.