Lindsay Lohan And Jake Paul Among Celebrities SEC Charged For Promoting Crypto

As part of the U.S. Securities and Exchange Commission's (SEC) ongoing enforcement of cryptocurrency regulations in the country, the agency has filed charges against celebrities and social media influencers, including Lindsay Lohan and Jake Paul, over crypto promotions.

A press release by the financial regulator listed eight celebrities--Lohan, Paul, DeAndre Cortez Way (Soulja Boy), Austin Mahone, Michele Mason (Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo) and Aliaune Thiam (Akon)--"for illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation."

The financial regulator had originally filed a complaint in the U.S. District Court for the Southern District of New York against TRON founder and crypto kingpin Justin Sun and three of his companies, namely Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent) allegedly "for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT)."

According to SEC chairman Gary Gensler, "This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure."

Lohan, Paul, Mason, McCollum, Smith and Thiam have reportedly agreed to pay over $400,000 in disgorgement.

"With the exception of Cortez Way and Mahone, the celebrities charged today agreed to pay a total of more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC's findings," the financial regulator revealed.

The charges filed against celebrities and influencers mirror the previous action by the U.S. SEC against celebrity Kim Kardashian and NBA star Paul Pierce, who were accused of promoting the EthereumMAX token.

Kardashian settled with the financial regulator in October 2022 and paid $1.26 million.

"While we're neutral about the technologies at issue, we're anything but neutral when it comes to investor protection," Gurbir Grewal, Director of the SEC's Division of Enforcement said. "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."

For the director, the alleged behavior of the TRON founder and that of his backer was a part of an "age-old playbook to mislead and harm investors."