Post by politicidal on Mar 23, 2023 17:45:55 GMT
The SEC on Wednesday disclosed that charges were filed against eight celebrities in connection with the broader investigation of crypto entrepreneur Justin Sun and 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 boldface names were charged with “illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation,” according to the SEC.
The list also includes rapper Soulja Boy, singers Austin Mahone and Akon and adult film star Kendra Lust. All but Mahone and Soulja Boy (aka DeAndre Cortez Way) 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,” per the SEC.
“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. “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.”
The SEC complaint, filed in New York’s Southern District federal court, accuses Sun of instructing the eight celebrities to not disclose that they were being paid to tout TRX and BTT assets on social media platforms.
A representative for Lohan said the actor was unaware of any disclosure obligations.
“Lindsay was contacted in March 2022 and was unaware of the disclosure requirement. She agreed to pay a fine to resolve the matter,” said spokeswoman Leslie Sloane.
Sun is accused of taking numerous steps to manipulate the market for those currencies through “wash trading,” which is explained 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 engaged “allegedly directed his employees to engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled,” according to the SEC. Sun also generated $31 million in proceeds through secondary market sales of illegal and unregistered sales of the token, per the SEC.
“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. “As alleged in the complaint, Sun and others used an age-old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those very securities. At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”
variety.com/2023/film/news/linsday-lohan-jake-paul-lil-yachty-justin-sun-crypto-1235561814/
The eight boldface names were charged with “illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation,” according to the SEC.
The list also includes rapper Soulja Boy, singers Austin Mahone and Akon and adult film star Kendra Lust. All but Mahone and Soulja Boy (aka DeAndre Cortez Way) 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,” per the SEC.
“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. “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.”
The SEC complaint, filed in New York’s Southern District federal court, accuses Sun of instructing the eight celebrities to not disclose that they were being paid to tout TRX and BTT assets on social media platforms.
A representative for Lohan said the actor was unaware of any disclosure obligations.
“Lindsay was contacted in March 2022 and was unaware of the disclosure requirement. She agreed to pay a fine to resolve the matter,” said spokeswoman Leslie Sloane.
Sun is accused of taking numerous steps to manipulate the market for those currencies through “wash trading,” which is explained 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 engaged “allegedly directed his employees to engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled,” according to the SEC. Sun also generated $31 million in proceeds through secondary market sales of illegal and unregistered sales of the token, per the SEC.
“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. “As alleged in the complaint, Sun and others used an age-old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those very securities. At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”
variety.com/2023/film/news/linsday-lohan-jake-paul-lil-yachty-justin-sun-crypto-1235561814/