The SEC continues to crack down on crypto’s celebrity promoters for failing to disclose that they were paid celebrity promoters. The Securities and Exchange Commission charged crypto-biz founder Justin Sun and three of his wholly owned companies — Tron Foundation, Ltd., BitTorrent Foundation, Ltd., and Rainberry, Inc. (formerly BitTorrent) — “for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT),” an SEC press release read. Sun and his companies were also accused of “extensive wash trading” and “fraudulently manipulating the secondary market for TRX.” The SEC also charged celebs for advertising TRX and/or BTT without disclosing that their posts were ads. Among the accused were Lindsay Lohan, Jake Paul, Soulja Boy, Austin Mahone, Kendra Lust, Lil Yachty, Ne-Yo, and Akon. Save for Mahone and Soulja Boy, all the accused celebs have agreed to pay a combined total of more than “$400,000 in disgorgement, interest, and penalties to settle the charges,” per the SEC. BBC News is reporting that Lohan’s chunk of that change is $40,000, while Paul was ordered to pay more than $100,000.
According to BBC News, Sun is a crypto investor and a diplomat for Grenada. He also once paid $4.6 million to have dinner with Warren Buffett. Sun bought BitTorrent through his Tron corporation in 2018. The strategy of asking celebs to promote cryptocurrencies does not belong to him alone, nor are these the first celebrities to have to pay the SEC. Last year, Kim Kardashian agreed to pay $1.26 million for failing to disclose a paid endorsement of the EMAX crypto token.