A group of eight popular celebrities, including Lindsay Lohan and Jake Paul, have been charged by US regulators for their participation in an illegal cryptocurrency scheme.
They are accused of illegally promoting TRX and BTT crypto assets without disclosing that they were paid to do so and the amount of their compensation. The charges were made public by the US Securities and Exchange Commission (SEC) on Wednesday.
According to the SEC, these stars boosted two crypto tokens using their social media platforms without disclosing that they were paid to promote them. 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.”
Lohan and Paul have already paid to settle the charges without admitting guilt. However, the other celebrities charged, namely Soulja Boy, Austin Mahone, Kendra Lust, Lil Yachty, Ne-Yo, and Akon, have paid a combined total of more than $400,000 to settle the charges.
The charges brought against these celebrities highlight the issue of celebrity endorsements of cryptocurrencies, which has caught the attention of regulators around the world. French lawmakers have recently approved an amendment that would ban influencers from promoting crypto assets that have not received a stamp of approval from government regulators.
Since no company currently holds a Financial Monetary Authority license, which is currently optional, influencers in France are not allowed to endorse any digital asset. Those who violate the rules could face a two-year prison sentence as well as a fine of €30,000. This ban on crypto endorsements was included in a bill addressing scams from influencers on social networks, alongside gambling and certain pharmaceutical products and procedures.