New York (CNN) — The Securities and Exchange Commission (SEC) charged Lindsay Lohan, Jake Paul and other celebrities on Wednesday for failing to report receiving payments to promote cryptocurrencies.
The celebrities agreed to pay $400,000, including fines, and return the money they received for the promotion.
Lohan raised $10,000 to promote Tronix tokens, which are offered by Justin Sun’s Tron company.
“I explored #DeFi and already like $JST, $SUN on $TRX. Super fast and a fee of 0. Good job @justinsuntron,” Lohan tweeted on February 11, 2021. The SEC noted that Lohan did not disclose that the tweet had been paid.
A Lohan spokesperson responded that the celebrity “was contacted in March 2022 and was unaware of the obligation to report advertising. She agreed to pay a fine to settle the matter.”
Similarly, Paul was paid $25,000 to promote Tronix, which he tweeted about a day after Lohan.
Among the other celebrities who have settled their charges are Michele Mason (aka Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo) and Aliaune Thiam (Akon).
For breaking the rule, Lohan agreed to pay $30,000 in penalties on top of the $10,000 she earned from the promotion. Paul agreed to pay $75,000 in penalties on top of the $25,000 he received.
A spokesman for Paul declined to comment.
The SEC also announced that it has sued Sun and three of its companies for failing to properly register cryptocurrency securities, manipulating the markets, and failing to disclose relationships with celebrities who received payments. He also sued DeAndre Cortez Way, known as Soulja Boy, who was allegedly a paid endorser of Tronix and did not disclose his ties to the company.
A Soulja Boy spokesperson could not be reached for comment.
“As the complaint alleges, Sun and others used old tricks to mislead and harm investors by first offering securities without meeting registration and publicity requirements, and then manipulating the market for those same securities,” said Gurbir Grewal, director of the SEC’s Division of Enforcement, in a statement. “At the same time, Sun paid celebrities with millions of social media followers to promote the unregistered offers, while specifically instructing them not to disclose their compensation.”
