SEC sues Justin Sun for his crypto schemes, along with Lindsay Lohan, Jake Paul, and Soulja Boy
Today, the SEC announced civil charges against Sun and eight celebrities, including Lindsay Lohan, Jake Paul, and Soulja Boy.
In a complaint filed Wednesday, the SEC claims the crypto entrepreneur engaged in market manipulation and the unregistered offer and sale of securities by dealing with his crypto assets TRX and BTT. The celebrities who touted the coin are being charged with not disclosing that they were being paid to do so and how much money they got. “Thus, the public was misled into believing that these celebrities had unbiased interest in TRX and BTT, and were not merely paid spokespersons,” the SEC claims.
In addition to Lohan, Paul, and Soulja Boy, the SEC also charged Austin Mahone, Michele Mason, Lil Yachty, Ne-Yo, and Akon. The SEC says the involved celebrities — except for Mahone and Soulja Boy — have settled the charges, which total over $400,000, without admitting or denying the SEC’s findings.
According to the SEC, Sun held unregistered “bounty programs” that would ask users to promote BTT and TRX on social media, as well as encouraged users to recruit others to its Discord and Telegram channels. Sun’s companies would then allegedly reward them with crypto for doing so. Additionally, the SEC claims Sun “directed the manipulative wash trading of TRX to create the artificial appearance of legitimate investor interest and keep TRX’s price afloat,” while his team “engaged in hundreds of thousands of TRX wash trades between accounts that Sun ultimately controlled.”
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” SEC Chair Gary Gensler says in a statement. “Sun further 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.”