B-List Celebs Including Lindsay Lohan Fined After Crypto Shill Probe
Eight very B-list celebrities have agreed to cough up fines after being accused of shilling a cryptocurrency without disclosing they were paid to do so, while the chap who apparently paid them has been charged with fraud.
That chap is named Justin Sun. He’s the owner of Tron Foundation Limited, BitTorrent Foundation Ltd, and Rainberry Inc – which used to be called BitTorrent.
According to the United States Securities and Exchange Commission (SEC), entities controlled by Sun sold crypto asset securities called Tronix (TRX) and BitTorrent (BTT) – but were not registered to do so.
The SEC alleges it detected Sun “fraudulently manipulating the secondary market for TRX through extensive wash trading, which involves the simultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership.”
He’s also accused of “orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing their compensation.”
“Celebrities” might be a bit of a stretch to describe the folks Sun recruited. Lindsay Lohan is probably the most famous – or infamous, given her career trajectory. For long-time Register readers, need we say more.
Lohan was billed as a partner of Sun’s and told Forbes: “I quickly realized that my community could benefit from crypto and that I could inform a large segment of society that wasn’t involved in the blockchain space and introduce them to it.”
She even released a single as an NFT, and promoted the TRX token as a way to acquire it…
Finally! Lullaby, my first music #NFT is live on @thefandao and the floor is at 200002 #TRX right now!
Use Chrome with a TronLink Wallet on your Laptops for best NFT viewing experience ❤️https://t.co/GORBSuPQQ7 ???? @justinsuntron ???? pic.twitter.com/fnFI5SHNp7
— Lindsay Lohan (@lindsaylohan) March 28, 2021
Be warned: clicking on the link above will result in your device playing a song by Lindsay Lohan.
Actor/boxer Jake Paul, rapper/producer DeAndre Cortez Way (aka Soulja Boy), YouTube popster Austin Mahone, adult performer Michele Mason, rapper Miles Parks McCollum (aka Lil Yachty), musician Shaffer Smith (aka Ne-Yo), and musician/philanthropist Aliaune Thiam (aka Akon) also, according to the SEC, shilled for Sun.
All bar Mahone and Soulja Boy paid a combined $400,000 in “disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings.”
The scale of Sun’s alleged washing scheme was substantial. The SEC alleges he “directed his employees to engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled, with between 4.5 million and 7.4 million TRX wash traded daily.”
“This scheme required a significant supply of TRX, which Sun allegedly provided. As alleged, Sun also sold TRX into the secondary market, generating proceeds of $31 million from illegal, unregistered offers and sales of the token.”
Gurbir S. Grewal, director of the SEC’s Division of Enforcement, stated that Sun used “an age-old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those very securities.
“At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”
So there you have it, dear reader. Lindsay Lohan and washed-up musicians might not always be entirely reliable sources of financial advice.
Who could possibly have guessed that might be the case? ®
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