You can be on Entrepreneur’s cover!

Jake Paul and Lindsay Lohan Fined $400,000 for 'Illegally Touting' Crypto The SEC just disclosed that eight celebrities agreed to a massive settlement without admitting guilt.

By Jonathan Small

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

The Securities and Exchange Commission (SEC) announced charges today against eight celebrities for "illegally touting TRX and/or BTT without disclosing that they were compensated for doing so and the amount of their compensation."

Lindsay Lohan, Jake Paul, Akon, Lil Yachty, and adult film star Kendra Lust were among the big names who agreed to pay a $400,000 settlement for their involvement in a shady crypto scheme.

None of them admitted guilt.

The charges were part of a broader investigation into crypto entrepreneur Justin Sun and his companies, Tronix (TRX) and BitTorrent (BTT).

Related: What is Happening In Crypto, What Happened to FTX and What Does It Mean for Web3?

Wash trading

According to a complaint filed in federal court in New York, Sun committed securities law violations by offering cryptocurrencies that were not correctly registered. Sun also engaged in "wash trading," which, according to the SEC, "involves the simultaneous or near-simultaneous purchase and sale of a security to make it appear actively traded without an actual change in beneficial ownership."

From April 2018 to February 2019, Sun had his employees "engage in more than 600,000 wash trades of TRX between two crypto asset trading platform accounts he controlled," according to the SEC.

Illegal promotion by celebs

Sun also paid celebrities such as Paul and Lohan to promote his unregistered crypto offerings "while specifically directing that they not disclose their compensation," said the SEC in a statement.

"This is the very conduct that the federal securities laws were designed to protect against," said Gurbir S. Grewal, director of the SEC's Division of Enforcement.

But a spokesperson for Lohan told Variety, "Lindsay was contacted in March 2022 and was unaware of the disclosure requirement. She agreed to pay a fine to resolve the matter."

The collapse of Sun's crypto empire is the latest bad news for crypto investors and the celebrities that endorse them.

Tom Brady and Kevin O'Leary were some of the high-profile names caught up in the FTX scandal, rumored to have lost much money due to the crypto exchange's financial ruin. They have not been charged with any crimes.

Jonathan Small

Entrepreneur Leadership Network® VIP

Founder, Write About Now Media

Jonathan Small is an award-winning author, journalist, producer, and podcast host. For 25 years, he has worked as a sought-after storyteller for top media companies such as The New York Times, Hearst, Entrepreneur, and Condé Nast. He has held executive roles at Glamour, Fitness, and Entrepreneur and regularly contributes to The New York Times, TV Guide, Cosmo, Details, Maxim, and Good Housekeeping. He is the former “Jake” advice columnist for Glamour magazine and the “Guy Guru” at Cosmo.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Resumes & Interviewing

Build a Better Resume with This $35 Subscription

AI Resume Builder promises to help you apply to jobs twice as fast.

Side Hustle

He Took His Side Hustle Full-Time After Being Laid Off From Meta in 2023 — Now He Earns About $200,000 a Year: 'Sweet, Sweet Irony'

When Scott Goodfriend moved from Los Angeles to New York City, he became "obsessed" with the city's culinary offerings — and saw a business opportunity.

Marketing

I Got Over 225,000 Views in Just 3 Months With Short-Form Video — Here's Why It's the New Era of Marketing

Thanks to our new short-form video content strategy, we've amassed over 225,000 video views in just three months. Learn how to increase brand awareness through short-form video content.

Business News

Samsung Makes 6 Day Workweeks Mandatory for Executives as the Company Enters 'Emergency Mode'

Samsung said its performance "fell short of expectations" last year. Now executives are required to work weekends.

Productivity

6 Habits That Help Successful People Maximize Their Time

There aren't enough hours in the day, but these tips will make them feel slightly more productive.

Leadership

You Won't Have a Strong Leadership Presence Until You Master These 5 Attributes

If you are a poor leader internally, you will be a poor leader externally.