SEC says Mahone and other celebs like Soulja Boy and Lindsay Lohan touted cryptocurrencies without disclosing they were paid for it.
Those charges came as the SEC announced charges against crypto asset entrepreneur Justin Sun and three of his companies, including Tron Foundation Limited, BitTorrent Foundation Ltd. and Rainberry Inc. .
Sun was charged with the unregistered offer and sale of crypto asset securities Tronix and BitTorrent and was also charged with fraudulently manipulating the secondary market for TRX by simultaneously purchasing and selling the security to make it seem actively traded. Sun allegedly also orchestrated a scheme to pay celebrities, including Mahone, to tout TRX and BTT without disclosing their compensation.
The eight celebrities charged in the scheme are Mahone, Lohan and Paul, as well as Soulja Boy , Lil Yachty , Ne-Yo , Akon and Kendra Lust . The celebrities were each charged for touting cryptocurrencies associated with Sun's companies without disclosing that they were paid for doing so and how much they were paid.
"Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation," Gurbir S. Grewal, director of the SEC's Division of Enforcement, said in a statement."This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.
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