Lindsay Lohan is one of eight celebrities to have been charged by the US Securities and Exchange Commission (SEC) with illegally promoting crypto assets.
Along with social media personality and boxer Jake Paul, rapper Lil Yachty and other entertainment industry figures, Lohan was charged with “illegally touting” asset securities without revealing that they were being paid to do so and not disclosing how much they were paid.
Lohan, Paul, Miles Parks McCollum (Lil Yachty) and three of the other charged celebrities – Michele Mason (Kendra Lust), Shaffer Smith (Ne-Yo), and Aliaune Thiam (Akon) – have settled the matter and collectively paid more than $400,000 without admitting or denying the SEC’s findings.
DeAndre Cortez Way (Soulja Boy) and Austin Mahone are the other two celebrities who are understood to have not settled the charges at time of writing.
The charges came as part of a wider investigation into businessman Justin Sun and three of his companies, Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent), for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT).
The SEC alleged that Sun and his companies offered and sold TRX and BTT as investments through a number of schemes which directed people to promote the tokens on social media, join and recruit others to affiliated channels, and create BitTorrent accounts in exchange for TRX and BTT distributions.
The Commission also charged Sun and his companies with fraudulently manipulating the secondary market for TRX from at least April 2018 to February 2019 through more than 600,000 “wash trades”. Wash trading is a market manipulation technique often used to artifically inflate value when a security is bought and sold almost simultaneously to make it look as if it was actively traded, without incurring any change in beneficial ownership.
Sun, BitTorrent Foundation, and Rainberry are also charged with offering and selling BTT in unregistered monthly airdrops to investors who purchased and held TRX in Tron wallets or on participating crypto asset trading platforms. The Commission said each unregistered offer and sale was in violation of the Securities Act.
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” said SEC chair Gary Gensler.
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