Lindsay Lohan, Jake Paul, and a number of other celebrities have been charged for unlawfully marketing the cryptocurrency of a Chinese entrepreneur who has been accused of fraud.
The Securities and Exchange Commission (SEC) of the United States said on Wednesday that it has accused Justin Sun with intentionally increasing the trading volume of Tronix (TRX) and BitTorrent (BTT) and concealing payments made to celebrities to promote the tokens.
Eight celebrities were charged of unlawfully promoting tokens in Justin Sun case.
In its court lawsuit, the SEC said that Sun, the owner of Tron Foundation, BitTorrent Foundation, and Rainberry, instructed employees to undertake hundreds of thousands of simultaneous or near-simultaneous purchases and sales of TRX and BTT without any actual change in ownership.
Sun’s attempts to create the illusion of genuine trading, according to the SEC, made it simpler to sell TRX while maintaining constant pricing, resulting in tens of millions of dollars in unlawful profits at the cost of investors.
Gary Gensler, chairman of the SEC, stated in a statement that “this action highlights once again the tremendous risk investors face when crypto asset securities are offered and sold without sufficient disclosure.”
Sun did not react quickly to a Twitter request for comment.
Lohan, Paul, Akon, Ne-Yo, and Lil Yachty, together with adult actress Michele Mason, are said to have promoted cryptocurrency investments to their millions of internet followers without disclosing that they had been compensated.
According to the SEC, the six agreed to pay more than $400,000 in disgorgement, interest, and penalties to settle the accusations.
Soulja Boy and Austin Mahone, two other celebrities cited in the SEC’s lawsuit, did not negotiate a settlement with the SEC, the agency said.
The SEC imposes civil penalties, such as fines, but never criminal charges.