In peak crypto times, some companies in that space were waving dollars (or non-fiat currencies, of course) at any passing celebrity willing to promote their businesses.
Some of those partnerships may now be becoming major regrets – not least when they land the celebs in hot water with regulators.
Witness the announcement this week that the US Securities and Exchange Commission (SEC) is suing crypto entrepreneur Justin Sun and three of his companies – including Rainberry Inc, which is the company formerly known as BitTorrent – for “the unregistered offer and sale of crypto asset securities”.
Sun and the firms have also been charged with fraudulently manipulating the market for one of those securities through ‘wash trading’ – a phenomenon we wrote about in February last year in the context of NFTs.
However, the SEC isn’t just charging Sun and his companies: it has also charged eight celebrities who promoted the schemes “without disclosing that they were compensated for doing so”.
The eight include musicians Soulja Boy, Austin Mahone, Lil Yachty, Ne-Yo and Akon, as well as actor Lindsay Lohan, influencer-turned-boxer Jake Paul, and adult entertainment star Kendra Lust.
“Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation,” said Gurbir S. Grewal, director of the SEC’s Division of Enforcement. “This is the very conduct that the federal securities laws were designed to protect against.”
Six of the celebs (all bar Soulja Boy and Lust) have agreed to pay $400k combined to settle the charges.
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