Lindsay Lohan, Jake Paul, Lil Yachty, other celebs hit with SEC charges for boosting crypto
In the latest example of what’s become a running trend in the world of cryptocurrency, the Securities and Exchange Commission on Wednesday announced charges against a host of celebrities for boosting crypto assets without properly disclosing that they were paid for their endorsements.
Those charged included “Mean Girls” and “Falling for Christmas” star Lindsay Lohan, social media personality and boxer Jake Paul and rapper Soulja Boy, according to an SEC release. Porn actor Kendra Lust and musicians Lil Yachty, Ne-Yo, Austin Mahone and Akon were also named in the agency’s complaint.
The spectacular collapse of crypto trading platform FTX has implicated not just tech evangelists but celebrities too. A class action lawsuit now seeks to hold some A-listers accountable.
The main focus of the SEC charges is Justin Sun, described as a “crypto asset entrepreneur” who owns a handful of crypto-related companies, including Tron Foundation and BitTorrent Foundation. He has been charged “for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT),” the SEC said in its release.
Sun, 32, is a Chinese national who is currently the permanent representative of Grenada to the World Trade Organization and is believed to be living in Singapore or Hong Kong, the SEC said.
The celebrities named by the SEC were charged with “illegally touting” the TRX and/or BTT crypto tokens “without disclosing that they were compensated for doing so and the amount of their compensation.”
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The complaint was filed in a federal district court in New York. SEC Chair Gary Gensler said in a statement that Sun “induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.”
With the exception of Soulja Boy and Mahone, the celebrities agreed to pay a total of more than $400,000 to settle the charges, without admitting or denying the SEC’s findings, the commission said.
“Lindsay was contacted in March 2022 and was unaware of the disclosure requirement,” said Leslie Sloane, a spokesperson for Lohan, in an email. “She agreed to pay a fine to resolve the matter.”
None of the other seven celebrities, or their representatives, immediately responded to requests for comment. Sun could not immediately be reached for comment.
The crypto industry, which is currently muddling through a protracted downturn, has long had a cozy relationship with celebrities, who offer publicity and legitimacy to the otherwise niche, complicated and oftentimes scam-ridden financial world.
The 2022 Super Bowl was awash in star-studded crypto ads (which were noticeably absent in 2023), and a memorable “Tonight Show” segment from that same year found Jimmy Fallon and Paris Hilton showing off their non-fungible tokens (or NFTs), a particularly frothy subclass of crypto assets.
But that crypto-celeb relationship doesn’t always end well.
Last October, the SEC fined media juggernaut Kim Kardashian more than $1 million for boosting different crypto assets, EthereumMax crypto tokens, on Instagram without disclosing that she was paid to do so. Similar charges were brought against Floyd Mayweather Jr. and DJ Khaled in 2018, and Steven Seagal in 2020.
A recent class action lawsuit sought to hold liable Tom Brady, Larry David, Steph Curry, Shaquille O’Neal and other big-name celebrities and athletes for their promotion of FTX, the crypto trading platform that suddenly collapsed late last year.
The SEC’s latest filings shed further light on the financial relationships at play between famous individuals and the crypto economy.
One document states that Lohan was paid $10,000 in February 2021 to promote TRX tokens on Twitter. Per a screenshot included in the filing, Lohan tweeted — using language given to her by one of Sun’s companies — “Exploring #DeFi and already liking $JST, $SUN on $TRX. Super fast and 0 fee. Good job @justinsuntron.”
Around the same time, according to another filing, Paul promoted TRX on Twitter “in exchange for a payment of crypto assets, valued at approximately $25,019.” Again, Tron “provided Paul with the specific language to include in the Tweet,” the SEC filing says.
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