Lil . Cruise, Akon, Ne-Yo, And Soulja Boy are among eight celebrities who have been charged by the Securities and Exchange Commission (SEC) with violating securities laws while promoting cryptocurrencies.
The list also includes Lindsay LohanAnd Jake PaulAlso a singer Austin Mahone and adult movie stars Kendra desiresSEC disclosed in a Press Release Wednesday.
Eight celebrities charged by the SEC for allegedly breaking the law when touting cryptocurrency
The allegations come amid a larger investigation into crypto entrepreneur Justin Sun along with three of his companies: Tron Foundation Limited, BitTorrent Foundation Ltd. and Rainberry Inc., marketed crypto-asset securities under the brand names Tronix (TRX) and BitTorrent (BTT).
According to the SEC report, eight celebrities “illegally offered TRX and/or BTT without disclosing the fact that they were paid for doing so, nor the amount they were paid.” .
The SEC complaint alleges Sun told eight celebrities not to disclose their ingredients to promote TRX and BTT on their social media platforms. “This case demonstrates once again the high risk that investors face when crypto asset securities are offered for sale without disclosing accurate information,” said SEC Chairman Gary Gensler.
“Accordingly, Sun and his companies not only targeted U.S. investors in their unregistered offerings and offerings, generating millions of dollars in illicit funds with at investors’ expense, but they also coordinated wash trading on an unregistered trading platform to create a misleading form of active trading. in TRX. Sun continued to entice investors to buy TRX and BTT by staging an advertising campaign in which he and his celebrity promoters concealed the fact that celebrities were being paid. money for their tweets.”
As of Thursday (March 23), all the celebrities charged, except Soulja Boy (aka DeAndre Cortez Way) and Malone, have reached settlements with the SEC involving “more than $400,000 interest, interest and penalties to settle the charges, without admitting or denying the SEC’s findings.” declared authority.
“With the exception of Cortez Way and Mahone, the celebrities charged today have agreed to pay a total of more than $400,000 in damages, interest and fines to settle the allegations without admitting or denying the allegations. SEC findings.”
Market Manipulated by Sun Through “Launder Trading,” Pocketed $31 Million in Proceeds in SEC States
Authorities claimed Sun manipulated the market for those cryptocurrencies through so-called “money laundering,” defined by the SEC as a process “involving the buying and selling of copper securities.” time or almost simultaneously to make it appear to be actively traded with no actual change in profit ownership.”
Between April 2018 and February 2019, Sun “allegedly directed his employees to participate in more than 600,000 TRX laundering transactions between two crypto asset trading platform accounts he controlled.” “.
He also allegedly made $31 million in proceeds through illegal and unregistered token sales on the secondary market, according to the SEC report.
“While we are neutral about the technologies in question, we are completely neutral when it comes to investor protection,” said Gurbir S. Grewal, Director of the SEC’s Enforcement Division. “
According to the SEC complaint, Sun and others misled investors by making an initial public offering of securities without complying with registration and disclosure requirements, prior to manipulating the market for the securities. securities are mentioned.
According to reports, Sun has been paying celebrities — all of whom have huge social media followings — to promote unregistered crypto services, while also asking them not to disclose its compensation.
