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Celebrities Settle with SEC over Undisclosed Promotion of Crypto Investments to Followers

Several celebrities, including actress Lindsay Lohan and rapper Akon, have agreed to pay tens of thousands of dollars to settle claims that they promoted cryptocurrency investments to their millions of social media followers without disclosing that they were being paid to do so. The Securities and Exchange Commission (SEC) announced on Wednesday that Lohan, Akon, recording artists Ne-Yo and Lil Yachty, boxer and internet personality Jake Paul, and adult film performer Michele Mason all agreed to pay more than USD 400,000 combined in disgorgement, interest and penalties to settle the claims.



According to the SEC complaint filed in federal court in New York, the celebrities were paid to promote Tronix (TRX) and BitTorrent (BTT), both crypto asset securities that were offered for sale by three companies owned by Justin Sun, a Chinese national. Sun allegedly offered to sell billions in the unregistered securities and engaged in manipulative trading, while also creating secondary markets on which Tronix and BitTorrent could be traded, according to the complaint.

The SEC claims that the celebrities' social media posts promoting TRX and BTT did not disclose that they had been paid, thus misleading the public into believing that they had unbiased interest in the cryptocurrencies and were not merely paid spokespersons. None of the celebrities admitted or denied the SEC's findings as part of the settlement.

Lohan, who was called to give up the USD 10,000 she was paid plus interest, and pay a USD 30,000 fine, according to the SEC complaint, was contacted in March 2022 and was unaware of the disclosure requirement, according to her publicist Leslie Sloane. Two other celebrities named in the SEC's complaint, rapper Soulja Boy and pop singer Austin Mahone, did not reach a settlement with the SEC.

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