Eight celebrities including Lindsay Lohan and Akon charged in illegal crypto scheme by U.S. regulators

Akon and Lindsay Lohan

23rd March 2023 – (New York) In a major crackdown on the illegal promotion of cryptocurrency, the US Securities and Exchange Commission (SEC) has charged eight celebrities, including Lindsay Lohan and Jake Paul, for participating in an illegal crypto scheme. The stars allegedly used their social platforms to promote two crypto tokens without disclosing that they were paid to do so. The charges were announced in a news release by the SEC on Wednesday.

According to the SEC, the 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 celebrities involved in the scheme are rapper Lil Yachty, musician Ne-Yo, Senegalese-American singer Akon, porn actress Kendra Lust, singer Austin Mahone, and musician Soulja Boy.

Crypto investor and diplomat for the Caribbean island nation of Grenada, Justin Sun, is also accused of fraud in the scheme. He is alleged to have manipulated 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 once paying $4.6m (£3.7m) to have dinner with investor Warren Buffett. His companies – Tron Foundation Limited, BitTorrent Foundation Ltd and Rainberry Inc (formerly BitTorrent) – are also charged as part of the scheme.

Lohan and Paul have paid to settle the charges without admitting guilt. The other celebrities, apart from Soulja Boy and Mahone, have paid a combined total of more than $400,000 to settle the charges. Lohan, who is best known for her role in the 2004 film Mean Girls, had 8.4 million Twitter followers when she posted a message calling for her followers to invest. The 36-year-old actress, who is a resident of Dubai in the United Arab Emirates, paid $10,000 to the SEC and another $30,000 in penalties. Paul, a YouTuber, boxer and resident of Puerto Rico, was ordered to pay more than $100,000.

SEC Chair Gary Gensler has warned investors of the high risks they face when crypto asset securities are offered and sold without proper disclosure. “Sun and his companies not only targeted US 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,” he said.

The SEC’s charges against the celebrities and companies involved in the illegal crypto scheme have brought to light the risks involved in the unregulated promotion of cryptocurrency. It is important for investors to be cautious and conduct thorough research before investing in any crypto asset securities. The charges against the celebrities and companies involved in this scheme serve as a warning to others who may be tempted to engage in similar illegal activities.