Eight celebrities have been accused by the Securities and Exchange Commission (SEC) of illegal crypto promotion.
The commission on Wednesday charged Ne-Yo, Soulja Boy, Akon, Lindsay Lohan, Jake Paul, Lil Yachty, Austin Mahone, and Kendra Lust for touting Tronix (TRX) and BitTorrent (BTT) cryptocurrencies.
SEC said the accused persons did not reveal that they were compensated for doing so, let alone disclose how much they were paid.
The commission also charged Justin Sun, the founder of Tronix (TRX) coin, and three of his companies: Tron Foundation Limited, BitTorrent Foundation Ltd, and Rainberry Inc, for the unregistered offer and sale of crypto asset securities.
Sun was also charged for fraudulently manipulating the secondary market for TRX through “wash trading to create an artificial appearance of legitimate investor interest and keep the price afloat”.
In a statement, Gary Gensler, SEC chair, said the case demonstrates the high-risk investors face when crypto asset securities are offered and sold without proper disclosure.
Ne-Yo, Akon, Lohan, Jake Paul, Lil Yachty, and Kendra Lust agreed to pay a total of $400,000 to settle the charges without admitting or denying the SEC’s findings.
Representatives for Soulja Boy and Mahone are yet to respond to requests for comment.
The charges were not the first actions by the SEC against celebrities it alleged had illegally promoted cryptocurrencies.
In October 2022, Kim Kardashian, the reality TV star, was charged for using her Instagram account to tout EthereumMax (EMAX) without divulging that she was being paid to promote it.
Kim also agreed to pay $1.26 million to settle SEC’s charges.