Celebrity Gossips

Soulja Boy, Ne-Yo, Akon Among Eight Celebs Charged By SEC For Crypto Promotion Scheme

Lil Yachty, Akon, Ne-Yo, and Soulja Boy are among eight celebrities that have been hit with Securities and Exchange Commission (SEC) charges over accusations of violating securities laws while promoting cryptocurrencies.

The list also includes Lindsay Lohan, and Jake Paul, as well as singer Austin Mahone and adult film star Kendra Lust, the SEC disclosed in a press release Wednesday.

Eight Celebs Charged By SEC For Allegedly Violating Laws While Touting Crypto

The charges come amidst a larger investigation of crypto entrepreneur Justin Sun along with three of his companies: Tron Foundation Limited, BitTorrent Foundation Ltd., and Rainberry Inc., which marketed crypto asset securities under the brand names Tronix (TRX) and BitTorrent (BTT).

The eight celebs reportedly “illegally touted TRX and/or BTT without disclosing the fact that they were compensated for doing so, as well as the amount they were compensated,” according to the SEC.

The SEC complaint accuses Sun of telling the eight celebrities not to disclose their composition to promote TRX and BTT on their social media platforms. SEC chair Gary Gensler said: “This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure.”

“As alleged, Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX. Sun further induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.”


As of Thursday (March 23), all of the celebs charged, minus Soulja Boy (aka DeAndre Cortez Way) and Malone, have reached settlements with the SEC that involve “more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings,” the agency states.

“With the exception of Cortez Way and Mahone, the celebrities charged today agreed to pay a total of more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings.”


Sun Manipulated Market Via “Wash Trading,” Pocketed $31 Million In Proceeds SEC States

Authorities claim Sun manipulated the market for those cryptocurrencies through what’s called “wash trading,” defined by the SEC as a process that “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.”

From April 2018 to February 2019, Sun “allegedly directed his employees to engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled.”.

He’s also accused of earning $31 million in proceeds via secondary market illegal and unregistered sales of the token, the SEC reports.

“While we’re neutral about the technologies at issue, we’re anything but neutral when it comes to investor protection,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement. “

Per the SEC complaint, Sun and others mislead investors by first offering securities without complying with registration and disclosure requirements, before manipulating the market for the securities in question.

Sun reportedly paid celebs – all of whom boast massive social media followings –  to promote the unregistered crypto offerings, all while specifically telling them  not disclose their compensation.