American stars will pay fines for advertising cryptocurrencies

8 celebrities will pay fines for conducting cryptocurrency shilling, concealing the fact that they received payment for advertising. And the «customer» of the advertisement was charged with fraud.

Justin Sun, the owner of Tron Foundation Limited, BitTorrent Foundation Ltd, and Rainberry Inc, formerly known as BitTorrent, is the subject of cryptocurrency promotion charges.

The U.S. Securities and Exchange Commission (SEC) stated that Sun’s organizations sold crypto assets under the names Tronix (TRX) and BitTorrent (BTT), but were not registered to trade assets.

According to the SEC, Sun manipulated the secondary market for TRX through a large fictitious trade that involved simultaneous or near-simultaneous purchases and sales of securities to create the impression that the securities were actively traded without an actual change in beneficial ownership.

He is also accused of «organizing a scheme to pay celebrities to advertise TRX and BTT without disclosing their remuneration».

One of the celebrities, Lindsay Lohan, said: «I quickly realized that I could benefit from cryptocurrencies and that I could inform a part of society that is not involved in the blockchain space and introduce users to this technology.»

The following superstars were involved in the cryptocurrency promotion scheme:

• actor/boxer Jake Paul
• rapper/producer DeAndre Cortez Way (Soulja Boy)
• singer and songwriter Austin Mahone;
• actress Michelle Mason;
• rapper Miles Parks McCollum (Lil Yachty);
• singer/producer Shaffer Smith (Ne-Yo);
• rapper/producer Aliaun Damala Thiam (Akon).

It is known that Austin Mahone and Soulja Boy paid a total of $ 400,000 in fines without admitting or denying the SEC’s findings.

The scale of the cryptocurrency promotion scheme was significant. According to the SEC, Justin Sun «instructed his shills to execute more than 600,000 fictitious TRX trades between two crypto exchange accounts he controlled, while conducting between 4.5 and 7.4 million fictitious TRX trades daily.»

Sun also allegedly sold TRX on the secondary market, earning $ 31 million from illegal unregistered offers and sales of the token.

Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said that Sun used «an old method to mislead and harm investors by first offering securities without complying with registration and disclosure requirements and then manipulating the market for those securities.»

Grewal said that Sun paid celebrities for advertising, agreeing with them not to disclose the fact of payment. According to Grewal, federal securities laws were designed to prevent such activities.