Image source, Getty Images
Image caption, Actress Lindsay Lohan is among eight celebrities who US regulators say failed to disclose they were being paid to promote cryptocurrencies
Eight celebrities, including Lindsay Lohan and Jake Paul, have been charged by US regulators with participating in an illegal crypto scheme.
The famous group allegedly used their social platforms to boost two crypto tokens without disclosing they were paid to promote them.
The charges were announced by the US Securities and Exchange Commission (SEC) in a news release on Wednesday.
Lohan and Paul have paid to settle the charges without admitting guilt.
The other celebs charged are:
DeAndre Cortez Way, the musician known as Soulja BoySinger Austin MahonePorn actress Michele Mason, aka Kendra LustMiles Parks McCollum, aka rapper Lil YachtyMusician Shaffer Smith, known professionally as Ne-YoSenegalese-American singer Aliaune Thiam aka AkonThe group is accused of illegally promoting TRX and BTT crypto assets “without disclosing that they were compensated for doing so and the amount of their compensation,” the SEC said.
Justin Sun, a crypto investor and diplomat for the Caribbean island nation of Grenada, is also accused of fraud by manipulating the trading activity of the two tokens to make it appear as if they were actively being traded in a crime known as “wash trading”.
Mr Sun, a Chinese-born protégé of Alibaba founder Jack Ma, is known for having once paid $4.6m (£3.7m) to have dinner with investor Warren Buffett.
He is accused of “orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweet,” the SEC added in their news release.
His companies – Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent) – are also charged as part of the scheme.
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” said SEC Chair Gary Gensler.
“Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading,” Mr Gensler added.
All of the celebrities, apart from Mr Cortez Way (Akon) and Mr Mahone have paid a combined total of more than $400,000 to settle the charges.