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The Securities and Exchange Commission (SEC), the regulatory body for the US financial market, accused eight celebrities, including the actress Lindsay Lohanthe youtuber jake paul and the singer ne-yoof violating stock market regulations by promoting cryptocurrencies without disclosing that they had been paid for it.
These accusations are part of the case filed by the SEC against crypto entrepreneur Justin Sun and its companies, Tron Foundation Ltd, BitTorrent Foundation Ltd and Rainberry Inc, for offering and selling the Tronix (TRX) and BitTorrent (BTT) cryptocurrencies without registration.
According to the SEC, Sun and his companies offered the cryptocurrencies as investments through bounty programs without registration, and the eight famous defendants illegally promoted TRX and/or BTT without disclosing that they received compensation for doing so.
The case also accuses Sun of manipulating Tronix’s brokerage by artificially inflating its secondary market trading and paying celebrities to promote its assets on social media.
Lindsay Lohan, Jake Paul, Ne-Yo (Shaffer Smith), porn actress Michele Mason (known as Kendra Lust), rapper lil yachty (Miles Parks McCollum) and singer Akon (Aliaune Thiam) decided to end the charges against him by paying a total amount exceeding $400,000 in restitution, interest, and penalties, without admitting or denying the agency’s findings.
However, the rapper soulja boy and the singer Austin Mahone, also defendants, did not reach an agreement with the SEC.
The increased supervision of cryptocurrencies by the US authorities comes after the bankruptcy of the FTX platform, which left many clients unable to withdraw their investments.
According to SEC Chairman Gary Gensler, “this case once again demonstrates the high risk investors face when cryptocurrencies are offered and sold without meeting disclosure requirements.”
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