The American actress Lindsay Lohan, the creator of YouTube content Jake Paul and the rapper Soulja Boy are some of the celebrities who were sued by the United States Securities and Exchange Commission (the well-known SEC) for promoting cryptocurrencies without telling their audience that they were getting paid for it.
The cryptocurrencies involved are two: TRX and MTB.
The body that regulates the financial sector of that country said that those involved agreed to pay fines that, together, total about 400,000 dollars to prevent the cases from advancing in justice.
This is the most immediate case in the fight by the United States authorities to defend investors from misleading advertising linked to digital assets.
The SEC’s legal actions indicate that, without telling her outright, Lohan and other famous people being sued (including singers Austin Mahone and Ne-Yo, rappers Lil Yachty and Akon, and adult video actress Kendra Lust), They received payments of $10,000 to promote cryptocurrencies among their followers on different social networks.
In the case of Lohan, the actress has to return what she received and pay a fine of 30 thousand dollars for not saying that her publications were part of advertising campaigns, publishes Variety.
Crypto entrepreneur Justin Sun and three of his companies are also involved in the case: Tron Foundation Limited, BitTorrent Foundation and Rainberry, firms that market digital assets under the Tronix (TRX) and BitTorrent (BTT) brands.
exploring #DeFi and already liking $JST, $SUN on $TRX. Super fast and 0 fee. good job @justinsuntron
— Lindsay Lohan (@lindsaylohan) February 11, 2021
All but Mahone and Soulja Boy (aka DeAndre Cortez-Way) settled out of court, the SEC said.
“Sun induced investors to buy TRX and BTT by organizing promotional campaigns in which he and famous people they hid the fact that influencers were being paid for their posts”said the SEC.
The SEC’s complaint expressly says that Justin Sun is accused of telling celebrities not to disclose that they were paid to promote cryptocurrency.
Deceptively promoting cryptocurrencies
In January 2022, the SEC indicted Kim Kardashian for promoting cryptocurrency on social media, especially on Instagram, without realizing that it was advertising.
In that case it was the cryptoactive called Ethereum-Maxabout which he did not reveal the payment he received for the promotion.
Months later, Kardashian agreed to pay $1.25 million in penalties and interest and to cooperate with the SEC investigation that also involved former boxer Floyd Mayweather and NBA player Paul.
Specifically, Kardashian, Mayweather and others were accused of supporting a fraud scheme orchestrated for the token’s creators to make millions from novice investors with little information. A “classic, fraudulent pyramid scheme,” the SEC said.
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