It has been alleged that Kae Paul and Lindsay Lohan promoted an unregistered cryptocurrency offering. They have been charged by the US Securities and Exchange Commission (SEC), who say that they were paid to promote a cryptocurrency offering without telling anyone. According to the SEC, Lohan and Paul promoted the offering on social media, encouraging their followers to invest in the project without revealing that they had been compensated to do so.
The SEC claims that Lohan and Paul broke federal securities laws by not disclosing the compensation they received for promoting the cryptocurrency. To prevent Lohan and Paul from participating in future digital securities offerings, the SEC is seeking monetary penalties and injunctions.
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It is important to note that these allegations are just that and that Lohan and Paul have not yet responded to the claims made by the SEC. The case, on the other hand, serves as a reminder that social media promoters of cryptocurrencies or other digital assets may be subject to securities laws and may be required to disclose compensation for doing so.
What exactly is the picture?
US authorities have put charges on eight famous people, including Jake Paul and Lindsay Lohan, for their involvement in a duplicitous cryptocurrency scheme.
It is suspected that the celebrities endorsed two cryptocurrency tokens using their social media platforms without revealing that they were paid to do so.
The charges were testified by the US Protections and Trade Commission (SEC) in a news release on Wednesday.
Without stating guilt, Lohan and Paul have paid to settle the charges.
The other celebs charged were also included in it-
- Musician Soulja Boy
- Singer Austin Mahone
- Porn actress Kendra Lust
- Rapper Lil Yachty
- Musician Ne-Yo
- Senegalese-American singer Aliaune Thiam
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,” according to the SEC. Members of the group include singer Austin Mahone (DeAndre Cortez Way), porn actress Kendra Lust (Michele Mason), rapper Lil Yachty (Miles Parks McCollum), musician Ne-Yo (Shaffer Smith), and Senegalese-American singer Aliaune Thiam (Akon
In a crime known as wash trading, Justin Sun, a crypto investor and Grenada diplomat, is accused of manipulating the trading activity of the two tokens to make it appear as though they were actively being traded.
It is common information that Mr. Sun, a Chinese-born acolyte of Alibaba founder Jack Ma, once paid $4.6 million (£3.7 million) to dine with investor Warren Buffett.
The SEC added this to their news release- Orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweet.
As part of the scheme, his companies, Tron Foundation Limited, BitTorrent Foundation Ltd, and Rainberry Inc (previously BitTorrent), are also charged.
SEC Chair Gary Gensler stated, This case demonstrates again the high-risk investors face when crypto asset securities are offered and sold without proper disclosure.
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According to the statement, Sun and his companies not only beleaguered US investors with their unregistered offers and sales, which give rise to the generation of millions in unlawful proceeds at the expense of investors, but they also synchronized wash trading on an unregistered trading platform to construct the presence of active trading.
Except for Mahone and Soulja Boy, the celebrities have all paid more than $400,000 to settle down the charges.
When she posted a message on Twitter advising her followers to invest, Lohan is best known for her role in the 2004 film Mean Girls and she ultimately had 8.4 million followers.
According to the charging documents, the 36-year-old actress who is residing in Dubai in the United Arab Emirates paid the SEC $10,000 and another $30,000 in penalties.
Paul, a Puerto Rico-based YouTuber, boxer, and resident, was also asked to pay more than $100,000.
Also Read: Cryptocurrency