The Securities and Exchange Commission has charged Grenada diplomat and crypto maven Justin Sun with fraud and unregistered securities, and also has charged YouTuber and boxer Jake Paul among other celebrities for promoting Sun’s Tronix and BitTorrent crypto assets. Actress Lindsay Lohan, musicians Soulja Boy, Austin Mahone,Akon, Lil Yachty, Ne-Yo and adult film star Kendra Lust were also charged alongside Paul.
“Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation,” SEC enforcement chief Gurbir Grewal said in a statement. “This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”
The SEC also alleged that the defendants in the case directed the “manipulative wash trading of TRX to create the artificial appearance of legitimate investor interest and keep TRX’s price afloat.”
In addition, the SEC noted that from mid-March 2018 to mid-February 2019, Sun and the Tron Foundation offered and sold approximately 542.6 million TRX tokens to investors, which equated to net proceeds of over $31.9 million for both parties.
All the celebrities aside from Soulja Boy and Mahone have agreed to pay a total of over $400,000 “in disgorgement, interest, and penalties” to settle the charges, without admitting or denying culpability regarding the SEC’s allegations.