Things are not looking so good lately for actress Lindsay Lohan, at least legally speaking, as she was accused, along with several celebrities, of an illegal sale of crypto-asset securities. The U.S. Securities and Exchange Commission (SEC), charged a few days ago, mainly, crypto-asset entrepreneur Justin Sun for the unregistered offer and sale of these digital assets.
Although Lohan was not a direct intermediary in the sale, she is implicated in the case because she was part of the offering of these products, as were other celebrities such as Austin Mahone, Ne-Yo, Akon, Jake Paul, Lil Yachty and Soulja Boy. These stars are being charged with the illegal promotion of products called TRX and BTT, and being paid for doing so without disclosing it.
The agency handling the case indicated that Sun fraudulently manipulated the market to make it appear that these crypto-assets were being actively traded, even though there was never an exchange with a beneficial owner. To accomplish this scheme, he bought and sold his assets in a sort of money laundering trading scheme, an act considered illegal.
“As alleged in the complaint, Sun and others used an old playbook to deceive and harm investors by first offering some securities without complying with registration and disclosure requirements, and then manipulating the market for those same securities,” the legal documents read.
“At the same time, Sun paid celebrities with millions of social media followers to promote the unregistered offerings, while specifically directing them not to disclose their compensation.”
The indictment against Lohan and the other celebrities is considered to be damning, which is why, apparently, those involved have already agreed to pay more than $400,000 in disgorgement, interest, and penalties to settle with the SEC, and if it is reached, they will not have to admit or deny any of the charges against them.
This crypto-asset situation is becoming a constant among celebrities, as last October the SEC also charged influencer and entrepreneur Kim Kardashian for a similar scheme involving the company EthereumMax, for which a fine of $1.26 million was given.
“Investors have a right to know whether a security’s advertising is unbiased, and Ms. Kardashian failed to disclose this information,” the agency commented at the time the lawsuit was lifted. And both then and now, the government agency advised the general public not to make decisions about investing, of any kind, solely based on the recommendations of celebrities or influencers.
What do you think about this situation, and do you think Lindsay Lohan and the rest of the celebrities involved will go all the way to court over this matter?
Story written in Spanish by Alex Vizzuet in Cultura Colectiva