American actress Lindsay Lohan, YouTuber Jake Paul, and six other celebrities were charged by the US Securities and Exchange Commission for touting cryptocurrencies on social media without revealing that they were paid to do so.
The charges come as part of a lawsuit targeting entrepreneur Justin Sun for marketing Tronix and BitTorrent crypto assets without enlisting the relevant authorities, and for managing crypto trading on his platform.
The recent case is one off from the enforcer of US regulations on the financial markets that has stepped up its crackdown on cryptocurrencies since the breathtaking collapse of industry leader FTX at the end of last year.
The SEC alleges that Sun aimed to raise Tronix by artificially forming the formation of trade on the secondary market by having his employees buy and sell the asset.
“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 in a statement.
Sun also influenced investors to purchase cryptocurrency through a campaign in which he and his celeb promoters secreted the fact they were paid for their tweets, Gensler said.
Without accepting or rejecting their culpability, Lohan and Paul agreed to pay $40,670 and $101,887 in restitution and fines respectively.
Pornographic film actress Michele Mason (also known as Kendra Lust), rapper Lil Yachty (Miles Parks McCollum), singers Ne-Yo (Shaffer Smith) and Akon (Aliaune Thiam) have also agreed to settle the lawsuit.
While Rapper Soulja Boy (DeAndre Cortez Way) and YouTube singer Austin Mahone were not part of the settlement.
