Actress Lindsay Lohan, rapper Akon, recording artists Ne-Yo and Lil Yachty, boxer and internet personality Jake Paul, and adult film performer Michele Mason have all agreed to pay more than $400,000 in combined disgorgement, interest and penalties in order to settle claims that they promoted crypto investments to their millions of social media followers without disclosing that they were being paid to do so. The settlement was reached with the Securities and Exchange Commission, although two other celebrities named in the SEC's complaint, rapper Soulja Boy and pop singer Austin Mahone, did not reach a settlement.
The complaint alleges that the celebrities were paid to promote Tronix (TRX) and BitTorrent (BTT), both crypto asset securities that were offered for sale by three companies owned by Justin Sun, a Chinese national. The SEC claims that the celebrities’ touts on social media did not disclose that they had been paid or the amounts of their payments, and thus misled the public into believing that these celebrities had unbiased interest in TRX and BTT.
The settlement is just the latest in a string of similar cases, with celebrities such as Kim Kardashian, Matt Damon, Tom Brady, Reese Witherspoon, Steven Seagal and others also having to pay fines for promoting crypto investments without disclosing that they were being paid to do so. It serves as an important reminder that celebrities and other influencers need to be aware of their obligations when it comes to promoting investments, regardless of the payment involved.