The US Securities and Exchange Commission (or SEC) strikes again with new charges against celebrities such as Lindsay Lohan, Jake Paul and others for illegally promoting Tron and BitTorrent crypto assets.
SEC: Lindsay Lohan, Jake Paul and others are facing charges for promoting crypto
The US SEC is not resting and continues to indict everyone who seems to be involved with Justin Sun’s Tron (TRX) and BitTorrent (BTT) crypto projects.
And indeed, according to reports, it appears that this time those involved in the charges are celebrities such as actor Lindsay Lohan, influencer Jake Paul and rapper Soulja Boy for illegally promoting cryptocurrencies.
Not only that, Austin Mahone, Michele Mason (known as Kendra Lust), Miles Parks McCollum (known as Lil Yachty), Shaffer Smith (known as Ne-Yo), Aliaune Thiam (known as Akon) also join the list.
In essence, these celebrities are alleged to have agreed to promote TRX and BTT in exchange for compensation from Justin Sun, who also allegedly ordered them not to publicly disclose how much they received.
On this subject, in a press release, SEC Chairman Gary Gensler reportedly said:
“This case demonstrates again the high-risk investors face when crypto asset securities are offered and sold without proper disclosure.”
SEC vs Lindsay Lohan, Jake Paul and others for their involvement with crypto TRX and BTT
The SEC federal regulator not only charged Lindsay Lohan, Jake Paul and all others for their “illegal” promotion of TRX and BTT, but also allegedly included their non-disclosure of the compensation they received for doing so.
At present, all the celebrities, excluding Soulja Boy and Mahone, have agreed to pay a total of more than $400,000 to settle the charges without admitting or denying the SEC’s findings.
The present indictment refers to the one just made public by the SEC toward Justin Sun, founder of TRX and BTT, but also toward the three of his wholly owned subsidiaries: Tron Foundation Limited, BitTorrent Foundation Ltd. and Rainberry Inc.
Again, the main charge is that of unregistered offer and sale of crypto securities. Not only that, the SEC added a charge of manipulating the secondary market, through “wash trading,” which involves buying and selling cryptocurrencies quickly to make them appear to be actively traded.
Specifically, Sun and his companies allegedly created a scheme to distribute billions of TRX and BTT to the public, while also creating active secondary markets on which TRX and BTT could be traded. As early as August 2017, the defendants allegedly sold crypto assets as securities, so were required to register the offerings and sales with the SEC at that time.
Crypto vs securities: the dilemma
The SEC once again finds itself involving another cryptocurrency in its crypto vs securities conundrum.
As a matter of fact, the still unfinished SEC case against Ripple seems to favor Justin Sun today. In this regard, there is still no precedent to support the theory that cryptocurrencies are securities, as the lawsuit has still been pending for over 2 years.
In all this time, the SEC has not yet been able to prove its theory, but rather Ripple CEO Brad Garlinghouse is apparently optimistic that this never-ending lawsuit against XRP will end in the middle of 2023.
Not only that, even Ripple’s lawyer John E. Deaton has repeatedly said that the SEC is practically in error and overstates its winning of the case. In fact, according to the legal expert, XRP does not meet the requirements of the Howey test and therefore is not a security.