The US Securities and Exchange Commission (SEC) has charged eight celebrities, including Jake Paul and Lindsay Lohan, with unlawfully promoting cryptocurrencies.
According to the SEC, these celebrities illegally promoted cryptocurrencies, thereby violating the anti-touting provisions of the federal securities laws. They failed to disclose the compensation they received for their promotional activities.
The SEC’s order further alleges that the celebrities’ promotions encouraged their followers to invest in initial coin offerings (ICOs) and other cryptocurrency products, promising high returns without disclosing their own financial interests in these offerings.
Paul, a YouTube personality, and Lohan, an actress, were among those charged by the SEC. Other celebrities charged include boxer Floyd Mayweather, rapper Khaled Khaled, and social media influencers.
The SEC stated that the charges were part of its ongoing efforts to crack down on the promotion of cryptocurrencies without proper disclosures to investors. In a press release, the SEC's Enforcement Division Director said, "With no disclosure about the payments, Mayweather and Khaled's ICO promotions may have appeared to be unbiased, rather than paid endorsements."
The SEC has previously taken action against several ICOs for violating securities laws, and has warned celebrities and other influencers about promoting ICOs and cryptocurrencies without proper disclosures. The SEC has also issued guidance on ICOs, stating that ICOs can be securities and subject to federal securities laws.
The SEC’s action against these celebrities could be seen as a warning to other public figures and influencers who promote cryptocurrencies without proper disclosures. The SEC’s enforcement action serves as a reminder that even celebrities and influencers are not above the law when it comes to promoting securities.