The Securities and Exchange Commission is cracking down on Crypto companies.
After only just emerging back into the public eye as the spokesperson for Pepsi’s questionable concoction of milk and cola with the questionable nickname “Pilk,” Lindsay Lohan is in hot water with the SEC over pitching crypto without disclosing that she was paid for the endorsements. She’s also not alone. According to The Hollywood Reporter, Lohan, Jake Paul, Kendra Lust, Soulja Boy, Ne-Yo, Lil Yachty, Akon, and Austin Mahone are all being charged in connection with their endorsements for TRON founder Justin Sun’s crypto companies.
“As alleged in the complaint, Sun and others used an age-old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those very securities,” said director of the SEC’s Division of Enforcement Gurbir S. Grewal. “At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”
The celebrities charged, except Soulja Boy and Mahone, have agreed to pay $400,000 and effectively plead no contest to avoid admitting wrongdoing. This isn’t legal advice, but they should all probably fire whoever gave them the legal advice that it’s cool to do paid crypto promotion without telling people (and the SEC) that you got paid.
These cases are different than other celebrity-endorsed-crypto cases in the recent past, including the FTX investors suing their celebrity endorsers for allegedly making crypto investments seem safer than they are. For now, most involved in this crypto flim-flam can chug a warm glass of pilk and be glad it’s all over.