SEC Charges Justin Sun and Celebrity Backers for Illegally Touting Crypto Assets

The Securities and Exchange Commission (SEC) announced charges on Wednesday against crypto entrepreneur Justin Sun and the celebrity backers of his crypto asset companies Tronix (TRX) and BitTorrent (BTT). The commission also charged eight celebrities for “illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation,” it said in a press release.

The list of eight celebrities facing charges includes actress Lindsay Lohan, social media personality Jake Paul and several other celebrities. The SEC said Lohan failed to disclose that a tweet was a paid endorsement. Similarly, Paul was paid $25,000 for a YouTube video promoting the crypto assets. A spokesperson for Lohan said the celebrity “was contacted in March 2022 and was unaware of the disclosure requirement.”

The SEC is accusing Sun and his companies of “orchestrating a scheme to pay celebrities to tout TRX and BTT without disclosing that they were being compensated for doing so.” The SEC filed the complaint against Sun and his companies for the unregistered offer and sale of crypto asset securities.

The celebrities agreed to pay $400,000, including fines, and return what they were paid for the promotion. Lohan was paid $10,000 to promote Tronix tokens offered by Justin Sun’s company Tron.

The SEC’s investigation is ongoing and the commission is continuing to investigate the matter. The SEC’s enforcement action is a reminder that celebrities must disclose their compensation when promoting investments.