Jake Paul, Lindsay Lohan Ensnared in Probe of Flashy Crypto Mogul
Eight celebrities, including Jake Paul, Lindsay Lohan, and Soulja Boy, were hit with charges by the Securities and Exchange Commission for illegally marketing digital assets affiliated with the flashy crypto entrepreneur Justin Sun, authorities announced on Wednesday.
Sun and his companies were also charged with offering and selling unregistered securities, and for manipulating the market by engaging in “wash trading,” the act of selling and repurchasing an asset “to make it appear actively traded without an actual change in beneficial ownership,” the commission said. Furthermore, Sun and the companies were charged with “orchestrating a scheme to pay celebrities to tout” the tokens without telling prospective investors they were receiving compensation.
“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,” Gurbir Grewal, director of the SEC’s Division of Enforcement, said in a press release. He added that the celebrities were “specifically” instructed not to reveal the payments, “the very conduct that the federal securities laws were designed to protect against.”