Soulja Boy, Lindsay Lohan, Lil Yachty, Ne-Yo And More Charged By SEC for Illegally Promoting Cryptocurrency Company

Several celebrities and musicians have been charged for the illegal promotion of a crypto company.

According to Billboard, on Wednesday, the Securities and Exchange Commission charged Lindsay Lohan, musicians Lil Yachty, Ne-Yo, Soulja Boy, Akon and Austin Mahone for illegally promoting the securities of a crypto company.

The post Soulja Boy, Lindsay Lohan, Lil Yachty, Ne-Yo And More Charged By SEC for Illegally Promoting Cryptocurrency Company appeared first on Blavity.

The SEC charged crypto asset entrepreneur Justin Sun and three of his companies for the unregistered offer and sale of crypto asset securities. Most of Sun’s sales were Tronix (TRX) and BitTorrent (BTT). Court documents named Tron Foundation Limited, Bit Torrent Foundation Limited and Rainberry, Inc. as the companies entangled in the fraud.

The outlet stated that Sun was also accused of fraudulently manipulating the secondary market for TRX. He committed fraud through “wash trading.” Sun would allegedly buy and sell the same stocks to claim growth or profit falsely.

Sun’s additional charges were paying celebrities to praise TRX and BTT without disclosing their compensation.

The celebrities listed had promoted the services of Sun’s companies under false pretenses.

Adult film star Kendra Lust and influencer Jake Paul were also celebrities who allegedly took payment to promote Sun’s services.

Billboard states that Mahone and Soulja Boy are the only celebrities charged that have not reached settlements with the SEC. They agreed to pay over $400,000 in “disgorgement, interest and penalties… without admitting or denying the SEC’s findings.”

The SEC claims that Sun’s actions violated Section 5 of the Securities Act.

The organization filed the complaint against the entrepreneur and his companies on March 22 in the U.S. District Court for the Southern District of New York.

The complaint states that the celebrities “illegally touting cryptocurrency asset securities Tronix (TRX) and BitTorrent (BTT) without disclosing that they were compensated for doing so and the amount of their compensation.”

SEC chair Gary Gensler provided a statement outlining how Sun and the aforementioned celebrities mislead potential investors, explaining, “This case demonstrates again the high-risk investors face when crypto asset securities are offered and sold without proper disclosure.”

He added, “As alleged, Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX.”

He mentioned the intentional use of connecting celebrities to his company, stating, “Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.”

Gurbir S. Grewal, director of the SEC’s enforcement division, doubled down on the organization being adamant about “investor protection.”

“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,” he said.

He added, “This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”