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US SEC Charges Fine on Akon And Other Celebrities For Illegal Crypto Promotion

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While the battle against false crypto promotions and other irregularities continues, the US SEC charged eight celebrities to pay fines worth thousands of dollars. On March 22, the Securities and Exchanges Commission accused the celebrities of illegally promoting digital assets. The regulator also charged a Chinese crypto entrepreneur Justin Sun with fraud.

The celebrities involved in the case include singers Akon and Ne-Yo, actress Lindsey Lohan, Austin Mahone, Jake Paul, and rapper Lil Yachty. The matter also involved Soulja Boy, a social media influencer, and porn actress Kendra Lust. According to the report, Soulja Boy and Mahone did not admit or defuse the charges but agreed to settle the SEC with an undisclosed amount.

Celebrities and Tron Foundation’s Justin Sun Falsely promoted Crypto Offerings, Says SEC

In detail, two celebrities involved in the illegal promotions, Mohane and Soulja Boy, have altogether paid over $400,000 to the SEC for the alleged offense. Lawyer to actress Lohan, Andrew Brettler, said his client was unaware of the disclosure requirements until March 2022. According to Brettler, Lohan cooperated with the SEC in the investigation and agreed to surrender the money she received from the promoters. She also promised to pay a fine to resolve the issue.

Meanwhile, Sun and his affiliated firms Tron Foundation, BitTorrent Foundation, and Rainberry have been under US regulators’ radar since 2017. In August 2017, the authorities accused them of deviously distributing billions in crypto assets and manipulating trading volumes. The SEC alleged that the Firms and Sun falsely increased their trading volumes to deceive crypto traders.

The regulator also alleged that Sun paid the celebrities to promote Tronix (TRX) and BitTorrent (BTT) on social media. According to the watchdog, celebrities mislead the public by praising the assets and making people think they have an objective interest in the crypto assets. In addition, the SEC said Sun’s illegal activities yielded millions of dollars in profit at investors’ expense.

The SEC Sues Ton Foundation CEO For Fraud And Violating Securities Law

In a statement, Gary Gensler, SEC chairman, said the matter reflects the high risks on investors when firms offer crypto asset securities without proper disclosure. The watchdog embarked on a rampage on cryptocurrency firms while tightening its rein on the crypto industry. Its enforcement actions accelerated after the FTX collapse that claimed millions of investors’ funds in November 2022.

The SEC filed a suit at the federal court of the Southern District of New York, alleging the businessman sold TRX and BTT securities without due registration. The commission also accused Sun of inflating TRX’s trading volume through wash trading.

According to the SEC, Sun and his employees conducted over 600 thousand wash trades between two crypto trading accounts he controlled from April 2018 to February 2019. The SEC said Sun and his staff carried daily wash trades with around 4.5 to 7.4 million TRX tokens.

The trade manipulations took the appearance of legitimate numbers and misled the public into thinking the assets were profitable. That made it easier for Sun to sell TRX while maintaining a stable price, generating $31 million in profit from unregistered securities offerings, alleged the SEC.

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