Celebrities Lindsay Lohan, Jake Paul charged for illegally promoting crypto

Actress Lindsay Lohan, YouTuber Jake Paul, and six other celebrities were charged by the US Securities and Exchange Commission for touting cryptocurrencies on social media without disclosing that they were paid to do so. 

The charges come as part of a case targeting entrepreneur Justin Sun for marketing Tronix and BitTorrent crypto assets without registering with the relevant authorities, and for manipulating crypto trading on his platform.

The case is one of several from the enforcer of US rules on the financial markets that has stepped up its crackdown on cryptocurrencies since the spectacular collapse of industry leader FTX at the end of last year.

The SEC alleges that Sun sought to boost Tronix by artificially creating the appearance of trade on the secondary market by having his own employees buy and sell the asset.

"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 in a statement.

Sun also induced investors to purchase cryptocurrency through a campaign in which he and his celebrity promoters hid the fact they were paid for their tweets, Gensler said.

Without admitting or denying their guilt, Lohan and Paul agreed to pay $40,670 (over P2 million) and $101,887 (over P5 million) in restitution and fines respectively. 

Pornographic film actress Michele Mason (also known as Kendra Lust), rapper Lil Yachty (Miles Parks McCollum), singers Ne-Yo (Shaffer Smith) and Akon (Aliaune Thiam) have also agreed to settle the lawsuit.

Rapper Soulja Boy (DeAndre Cortez Way) and YouTube singer Austin Mahone were not part of the settlement. (AFP)