SEC sues Justin Sun over his crypto schemes, plus Lindsay Lohan, Jake Paul and Soulja Boy

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Today the SEC announced civil lawsuits against Sun and eight celebrities, including Lindsay Lohan, Jake Paul and Soulja Boy.

In a lawsuit filed Wednesday, the SEC alleges the crypto entrepreneur engaged in market manipulation and the unregistered offering and selling of securities while dealing with its TRX and BTT cryptoassets. Celebrities who raved about the piece are accused of not disclosing that they were paid to do it and how much money they got. Thus, the public was misled into believing that these celebrities had an unbiased interest in TRX and BTT, and were not merely paid spokespersons, the SEC claims.

In addition to Lohan, Paul and Soulja Boy, the SEC has also indicted Austin Mahone, Michele Mason, Lil Yachty, Ne-Yo and Akon. The SEC says the celebrities involved, except for Mahone and Soulja Boy, settled the charges, which total more than $400,000, without admitting or denying the SEC’s findings.

According to the SEC, Sun ran unregistered bounty programs that required users to promote BTT and TRX on social media, and encouraged users to recruit others on its Discord and Telegram channels. The Suns companies would then reward them with crypto for doing so. Additionally, the SEC claims that Sun directed the manipulative washout trade of TRX to create the artificial appearance of legitimate investor interest and keep the price of TRX afloat, while his team engaged in hundreds of thousands of TRX wash transactions between accounts that Sun ultimately controlled.

This case further demonstrates the high risk investors face when securities of crypto assets are offered and sold without proper disclosure, SEC Chairman Gary Gensler said in a statement. Sun further enticed investors to buy TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that celebrities were being paid for their tweets.

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