The United States Securities and Exchange Commission charged crypto asset businessman Justin Sun for the unregistered offer and sale of crypto. With Justin Sun there are eight other celebrities booked under illegal touting.
According to reports, three companies of Justin Sun, the Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc. charged with the manipulation of unregistered offerings and sale of crypto securities Tronix (TRX) and BitTorrent (BTT).
On 22 March the SEC published a detailed report on the charges against eight celebrities namely, Lindsay Lohan, Jake Paul, DeAndre Cortez Way (Soulja Boy), Austin Mahone, Michele Mason, Miles Parks McCollum, Shaffer Smith, and Aliaune Thiam. In the report, it’s mentioned that Sun and his company were charged for illegally manipulating the secondary market for TRX using extensive wash trading.
The eight celebrities were booked for illegally touting TRX and not disclosed the amount of compensation paid for the touting. A complaint was filed in the New York southern district court alleging that Sun and his company traded securities of Tronix and BitTorrent through multiple unregistered bounty programs. The report also shows that Sun has paid celebrities with millions of followers on social media to manipulate the unregistered offerings. All eight celebrities were specifically advised to not disclose their deal with them.
All eight have violated section 5 of the securities act. The United States Securities and Exchange Commission has taken strict measures against these frauds to prevent the clients from any unforeseen fraudulent schemes. “This case demonstrates again the high-risk investors face when crypto asset securities are offered and sold without proper disclosure,” said SEC Chair Gary Gensler.
However, two of these celebrities, DeAndre Cortez Way and Austin Mahone decided to pay $400,000 in interest and penalties to resolve the charges against them. The US SEC’s strict measures against these celebrities will send a strong signal to violators who promoted these kinds of unregistered offerings on their social media platforms.
It is not the first incident in which the Securities and Exchange Commission has booked celebrities for violating the laws. In October 2022, famous hollywood celebrity Kim Kardashian paid $1.6 million to settle the charges of the SEC for posting a cryptocurrency advertisement on her Instagram account.