Lindsay Lohan, Jake Paul and Other Celebrities Accused of Promoting Cryptocurrencies

Lindsay Lohan, Jake Paul and Other Celebrities Accused of Promoting Cryptocurrencies

In the latest example of what has become a trend in the crypto world, the Securities and Exchange Commission on Wednesday announced charges against a number of celebrities for promoting crypto assets without properly disclosing that they were paid for their endorsements.

Among the defendants were “Mean Girls” and “Falling for Christmas” star Lindsay Lohan, social media personality and boxer Jake Paul and rapper Soulja Boy, according to an SEC filing. Porn actress Kendra Lust and musicians Lil Yachty, Ne-Yo, Austin Mahone and Akon were also named in the agency’s complaint.

The main focus of the SEC’s allegations is Justin Sun, described as a “crypto entrepreneur” who owns a handful of cryptocurrency-related companies, including the Tron Foundation and the BitTorrent Foundation. He was indicted “for the unregistered offering and sale of securities of the Tronix (TRX) and BitTorrent (BTT) crypto assets,” the SEC said in its filing.

Sun, 32, is a Chinese national who is currently Grenada’s permanent representative to the World Trade Organization and is believed to be living in Singapore or Hong Kong, the SEC said.

The SEC-appointed celebrities were accused of “illegally promoting” TRX and/or BTT cryptocurrency tokens “without disclosing that they were compensated for it and the amount of their compensation.”

The complaint was filed in a federal district court in New York. SEC Chairman Gary Gensler said in a statement that Sun “led investors into buying TRX and BTT through a promotional campaign in which he and his celebrity promoters concealed the fact that celebrities were being 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,” Leslie Sloane, Lohan’s spokeswoman, said in an email. “She agreed to pay a fine to settle 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, currently in the midst of a prolonged recession, has long enjoyed a comfortable relationship with celebrities, who offer publicity and legitimacy to the niche, complicated and often fraud-ridden financial world.

The 2022 Super Bowl was flooded with star-studded crypto announcements (which were noticeably absent in 2023), and a memorable segment of that same year’s “Tonight Show” showed Jimmy Fallon and Paris Hilton showing off their non-fungible tokens (or NFTs), a particularly frothy subclass of crypto assets.

But this crypto-celebrity relationship doesn’t always end well.

Last October, the SEC fined Kim Kardashian more than $1 million for pushing different crypto assets, EthereumMax crypto tokens, on Instagram without disclosing that she was paid for it. Similar accusations were made against Floyd Mayweather Jr. and DJ Khaled in 2018, and Steven Seagal in 2020.

A recent class-action lawsuit sought to hold Tom Brady, Larry David, Steph Curry, Shaquille O’Neal and other celebrities and high-profile athletes accountable for their promotion of FTX, the cryptocurrency trading platform that suddenly went down late last year.

The latest SEC filings shed more light on the financial relationships at play between famous people and the crypto economy.

A document indicates that Lohan was paid $10,000 in February 2021 to promote TRX tokens on Twitter. According to a screenshot included in the presentation, Lohan tweeted, using language given to her by one of Sun’s companies: “Exploring #DeFi and already enjoying $JST, $SUN on $TRX. Super fast and 0 fee. Good job @justinsuntron.”

Around the same time, according to another document, Paul promoted TRX on Twitter “in exchange for a payment of crypto assets, valued at approximately $25,019.” Once again, Tron “provided Paul with specific language to include in the Tweet,” the SEC filing reads.

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