March 27, 2023
By Anjali Kochhar
Eight celebrities, including Lindsay Lohan and Jake Paul, have been charged by US regulators with participating in an illegal crypto scheme. The stars allegedly used their social platforms to boost two crypto tokens without disclosing they were paid to promote them.
The charges were announced by the US Securities and Exchange Commission (SEC) in a news release on Wednesday.
Lohan and Paul have paid to settle the charges without admitting guilt.
The other celebs charged include Musician Soulja Boy (DeAndre Cortez Way), Singer Austin Mahone, Porn actress Kendra Lust (Michele Mason), Rapper Lil Yachty (Miles Parks McCollum), Musician Ne-Yo (Shaffer Smith) and Senegalese-American singer Aliaune Thiam (Akon).
The group is accused of illegally promoting TRX and BTT crypto assets “without disclosing that they were compensated for doing so and the amount of their compensation”, the SEC said.
Justin Sun, a crypto investor and diplomat for the Caribbean island nation of Grenada, is also accused of fraud by manipulating the trading activity of the two tokens to make it appear as if they were actively being traded in a crime known as “wash trading”.
Mr Sun, a Chinese-born protégé of Alibaba founder Jack Ma, is known for having once paid $4.6m (£3.7m) to have dinner with investor Warren Buffett.
“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.
“Sun and his companies not only targeted US 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.”
All of the celebrities, apart from Soulja Boy and Mahone, have paid a combined total of more than $400,000 to settle the charges.
Lohan, who is best known for her role in the 2004 film Mean Girls, had 8.4 million Twitter followers when she posted a message calling for her followers to invest.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.