wow! As the house of cards most (or all?) of the crypto currency market collapsed before our eyes, it took many celebrities!
Critics have been saying for years that stars who use the platform for crypto should be ashamed. In some cases, they have experienced real financial consequences – like Tom Brady and Gisele which reportedly lost millions as a market FTX has been exposed. But what about valid the result?
Looks like some celebrities are actually being sued! At Securities and Exchange Commission it was revealed that they filed charges against him Lindsay Lohan! With The Parent Trap star is not alone! Youtube megastar Jake Paul, Lil Yachty, Soulja Boy, Ne-Yo, Austin Mahone, Accountand porn stars Kendra Lust has been accused of “unlawfully mentioning TRX and/or BTT without disclosing that he received compensation for doing so and the amount of compensation.”
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It’s TRX TronixBTT is BitTorrent. Both are crypto brand names tied to entrepreneurs Justin Sun, whose business is the target of a larger investigation by the SEC. Sun allegedly instructed celebrities to plug the brand without saying they were paid – to make it look like it was a good thing they were doing just because they believed in it. That seems to be a crime when it comes to investing. SEC Chair Gary Gensler explained:
“This case once again demonstrates the high risk investors face when crypto asset securities are offered and sold without proper disclosure. As alleged, Sun and his companies not only targeted US investors in unregistered offers and sales, generating millions of illegal proceeds at the expense of investors , but also coordinate washing trades on unregistered trading platforms to create a confusing appearance of active trading. TRX.”
As you know, “wash trade” is when you own two companies and have one buy a lot of shares in the other and vice versa, sell back and forth to make it appear. digitally as there is a lot of active trading of stocks going on. It looks really hot, in other words. But really you’re just selling yourself, juggling the stock around without changing ownership. It’s a great trick, in other words. As for the celebrity component, Gensler continues:
“Sun further induced investors to buy TRX and BTT by organizing a promotional campaign where he and celebrity promoters hid the fact that celebrities were being paid for tweets.”
Lindsay doesn’t know she’s committed a crime, according to her rep, something everyone knows. The lack of knowledge that most people have about finances is the reason for fraud. Her spokesperson said in a statement:
“Lindsay was contacted in March 2022 and did not understand the disclosure requirements. She agreed to pay a fine to settle the matter.
Well, none of these stars are going to jail or anything. As in many cases of white-collar financial crime, the punishment is not prison but financial restitution – the payment of large fines. According to the SEC, 6 of the 8 celebrities (all but Mahone and Soulja Boy) have settled, agreeing to pay “more than $400,000 in disgorgement, interest, and penalties to settle the allegations, without admitting or denying the SEC’s findings.”
Hopefully this will make other celebrities think twice before snapping up something that many people online are warning is a lousy investment.
[Image via The Tonight Show/Harper’s Bazaar/YouTube/Jake Paul/Instagram.]