The Securities and Exchange Commission has repressed about the business of crypto entrepreneur Justin Sun and has loaded him for the unrecorded offer and sale of the Tronix and BitTorrent tokens. If those tokens sound familiar to even non-hardcore crypto enthusiasts, it’s because various celebrities have promoted them on social media, and now the agency is cashing in on them, too. According to the SEC, eight celebrities, including Lindsay Lohan, Jake Paul, Soulja Boy, Ne-Yo, and Akon, illegally promoted the tokens online without disclosing that they were paid to do so.
“…Sun paid celebrities with millions of social media followers to promote the unregistered offerings, while specifically instructing them not to disclose their compensation. This is conduct that federal securities laws were designed to protect against, regardless of the labels Sun and others used,” Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement.
All of the celebrities charged, with the exception of Soulja Boy and musician Austin Mahone, have agreed to pay a collective amount of $400,000 in fines to settle the charges. It’s not the first time the SEC has gone after celebrities selling cryptocurrency on social media: it previously charged Kim Kardashian and NBA Hall of Famer Paul Pierce for posting about undisclosed EthereumMax EMAX tokens. that they had been paid for the promotion. Kardashian paid $1.26 million to settle the charges against her, while Pierce paid $1.4 million.
As for Sun himself, the SEC accused him of violating the anti-fraud and market manipulation provisions of the federal securities laws. The agency said it offered the tokens as investments through unregistered bounty programs that prompted participants to promote the tokens on social media and recruit others. In addition, the SEC also accused Sun of ordering employees to artificially inflate the value of Tronix by simultaneously selling and buying the token to make it appear as if it is actively traded.
“As alleged in the complaint,” Grewal said, “Sun and others used an old playbook to mislead and harm investors by first offering securities without meeting registration and disclosure requirements and then manipulating the market for those same.” values”.
