<p>Former Disney star <a href="https://www.dailywire.com/topic/lindsay-lohan" target="_blank" rel="noopener">Lindsay Lohan</a> and YouTuber-turned-boxer Jake Paul are two celebrities among several others that face federal charges for illegally touting crypto asset securities from a digital currency entrepreneur.</p>
<p>The Securities and Exchange Commission announced <a href="https://www.sec.gov/news/press-release/2023-59">charges</a> Wednesday against crypto asset entrepreneur Justin Sun and three of his companies — Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. (formerly BitTorrent) — for the unregistered offer and sale of crypto asset securities Tronix (TRX) and BitTorrent (BTT).</p>
<p>The commission accused Sun and his companies of &#8220;orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation,&#8221; which included Lohan, Paul, and DeAndre Cortez Way, otherwise known as American rapper Soulja Boy.</p>
<p>Authorities also named musicians Austin Mahone, Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo), Aliaune Thiam (Akon), and adult actress Michele Mason (Kendra Lust) in the complaint.</p>
<p>According to the complaint, unregistered offers and sales violate Section 5 of the Securities Act, which requires all issuers to register non-exempt securities with the Securities and Exchange Commission.</p>
<p>SEC Chair Gary Gensler said in a news release that such charges demonstrate the high risk investors face when crypto asset securities are offered and sold without proper disclosure.</p>
<p>&#8220;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 in TRX,&#8221; Gensler said. &#8220;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.&#8221;</p>
<p>According to the complainant, the celebrities fraudulently manipulated the crypto market for Sun&#8217;s companies by extensive wash trading, which allegedly involved purchasing and selling securities &#8220;to make it appear actively traded without an actual change in beneficial ownership.&#8221;</p>
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<p>&#8220;While we&#8217;re neutral about the technologies at issue, we&#8217;re anything but neutral when it comes to investor protection,&#8221; Gurbir S. Grewal, Director of the SEC&#8217;s Division of Enforcement, said.</p>
<p>Grewal called Sun&#8217;s move an &#8220;age-old playbook&#8221; intended to mislead and harm investors, which offers securities without registration and disclosure compliance before manipulating the market for such securities.</p>
<p>&#8220;Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation,&#8221; he said. &#8220;This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.&#8221;</p>
<p>Aside from Soulja Boy and singer Austin Mahone, the celebrities accused of touting Sun&#8217;s crypto scheme have agreed to pay more than $400,000 in interest and penalties to settle the charges. However, the accused has neither admitted nor denied the allegations.</p>
<p>Andrew Brettler, a lawyer for Lohan, told <a href="https://www.reuters.com/legal/sec-sues-justin-sun-others-over-illegal-crypto-sales-2023-03-22/">Reuters</a> the actress was unaware of the disclosure requirements until last March.</p>
<p>&#8220;From the outset, she cooperated with the SEC&#8217;s investigation and ultimately agreed to disgorge the small amount of money she received and paid a fine to resolve this matter,&#8221; her attorney Andrew Brettler said in an emailed statement to the outlet.</p>
<p>Lawyers for Sun and the others named in the complaint either could not be identified, declined to comment, or did not respond immediately to requests for comment.</p>

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Lindsay Lohan, Jake Paul Charged For ‘Touting’ Illegal Crypto Scheme

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Lindsay Lohan, Jake Paul Charged For ‘Touting’ Illegal Crypto Scheme