Lindsay Lohan and Jake Paul in Sec’s crosshairs over cryptocurrency
A total of eight celebrities, including Lindsay Lohan and Jake Paul, have been charged by US regulators for promoting two cryptocurrencies illegally.
All these stars have started promoting the two cryptocurrencies illegally on their social media platforms. But, of course, they didn’t tell anyone they were getting paid for this task.
However, it is essential to note that attempting to manipulate the market in any way, including promoting a specific cryptocurrency to cause fluctuations, is illegal and unethical. It is also important to note that cryptocurrency markets can be highly volatile and subject to many factors beyond any individual’s control.
The Securities and Exchange Commission has announced these charges. With such happenings, Lohan and Paul only have to settle the charges without admitting guilt.
Key Takeaways:
- SEC has charged Diplomat Justin Sun for participating in fraudulent activities by promoting crypto against money. Additionally, Lohan and Jake Paul were also accused of doing this task.
- The trade manipulation of two crypto tokens without disclosing compensation is an illegal task.
- Justin Sun was charged by the SEC for promoting two cryptocurrencies, Tronix and BitTorrent.
The SEC has alleged that Sun engaged in fraud by manipulating the market of two tokens. He showed the appearance of two tokens for active trading when they don’t even exist.
Sun allegedly forced investors to buy Tronix and BitTorrent in a promotional campaign with some other stars. But unfortunately, all those stars were also promoting these two cryptocurrencies without keeping them familiar that they were getting paid for this.
The Celebrities Who Have Been Charged are-
- Actress Lindsay Lohan
- Social Media Personality Jake Paul
- Musician DeAndre Cortez Way
- Musician Austin Mahone
- Porn actress Michele Mason
- Musician Miles Parks McCollum
- Musician Shaffer Smith
- Musician Aliaune Thiam
Deandre Cortex and Austin Mahone agreed to pay the $400,000 in disgorgement, interest, and penalties for settling the charges.
After the incident, NPR contacted all the representatives and celebrities to comment. However, they didn’t comment immediately, and Jake Paul declined to comment.
The popularity of crypto is bringing numerous opportunities for celebrities to buy and promote digital currencies.
But, regulators are keeping a strong eye to check this illegal behavior in the crypto market. Many celebrities already came into deep trouble because of their illicit activities.
Kim Kardashian was also charged for using her Instagram account to promote a cryptocurrency without divulging that she was getting paid for the task.
Group was Accused because of promoting TRX and BTT Cryptos:
The whole group of celebs got accused of promoting TRX and BTT crypto assets. However, the biggest curse was that they have yet to disclose that they are getting compensation for promoting these crypto assets.
SEC said, “they haven’t disclosed any information or even the amount they are getting paid for promoting these two cryptocurrencies.”
Justin Sun is a famous crypto investor accused of manipulating two cryptos’ trading activity. First, he made those cryptos appear as actively trading in a crime known as Wash Trading.
Mr. Sun was accused of orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that they were getting paid for this campaign.
His companies, Tron Foundation Limited, BitTorrent Foundation Limited, and Rainberry Inc, were charged for the scheme.
This case again demonstrates high-risk investors when crypto asset securities are offered and sold without proper disclosure.
Sun and his affiliated companies not only focused on soliciting investments from US investors without proper registration, resulting in illegal profits gained at the investors’ expense. They also orchestrated wash trading activities on an unregistered platform to deceive investors into thinking that significant trading activity was occurring.
All the celebrities except DeAndre Cortez and Austin Mahone must pay a combined total of more than $400,000 to settle the charges.
Lohan is a celebrity of all time; she has more than 8.4 million followers on Twitter. She also insisted her followers invest in these cryptos for better returns. She is a resident of Dubai who paid $10,000 to SEC and $30,000 as penalties.
Paul, a YouTuber, boxer, and Puerto Rico resident must pay more than $100,000.
Final Words
In conclusion, the charges filed by federal regulators against the celebrities and Justin Sun highlight the need for transparency in the cryptocurrency market.
The failure to disclose payment for promoting these cryptocurrencies and the alleged manipulative tactics employed by Sun and his companies undermine the market’s integrity and harms investors.
It serves as a reminder that the cryptocurrency industry is still largely unregulated, and investors should exercise caution before investing their money in digital assets.
Individuals and companies must act by securities laws in the cryptocurrency market to ensure fair and ethical trading practices.
FAQs
What cryptocurrencies are involved in the charges against celebrities and Justin Sun?
Tronix (TRX) and BitTorrent (BTT) are the two cryptocurrencies involved in the charges.
Who are the celebrities charged in this case?
Eight celebrities, including actor Lindsay Lohan, influencer Jake Paul, and rapper Soulja Boy, have been charged.
Who is Justin Sun, and what is his involvement in the case?
Justin Sun is a crypto entrepreneur who sold the two cryptocurrencies involved in the case, Tronix (TRX) and BitTorrent (BTT). He is also the founder and CEO of Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc, all accused of the unregistered offer and sale of crypto asset securities and manipulating the secondary market.
What is “wash trading,” and how was it used in this case?
“Wash trading” involves rapidly buying and selling cryptocurrencies to create the illusion of active trading. Sun and his companies are accused of manipulating the secondary market by engaging in this practice.
What is the significance of this case for the cryptocurrency market?
This case highlights the need for transparency and regulation in the cryptocurrency market. The failure to disclose payment for promoting cryptocurrencies and alleged manipulative tactics undermine the integrity of the market and harm investors.
Individuals and companies involved in the cryptocurrency market act must follow securities laws to ensure fair and ethical trading practices.
