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The latest group of celebs (and pseudo-celebs) hit with federal charges after hawking cryptocurrencies would probably make a decent mixtape. At minimum, it would be sonically interesting.
According to the Securities and Exchange Commission, this latest bunch includes rappers Lil Yachty and Soulja Boy, R&B singers Austin Mahone (whose songs I’ve never heard but who I’m told can carry a tune) and Ne-Yo, and pop star Akon. There’s also Lindsay Lohan, who’d make a solid background dancer. And there’s also adult film star Kendra Lust and social media fiend Jake Paul. Clearly, we see a range of talents here.
The SEC said Wednesday that it had filed civil charges against all of them for promoting cryptocurrencies without disclosing that a crypto entrepreneur had paid them to do so. The SEC accused the entrepreneur, Justin Sun, of fraud in the same announcement.
The SEC said all of the celebrities except for Soulja Boy (whose real name is DeAndre Cortez Way) and Mahone agreed to a combined settlement totaling more than $400,000. Under the settlement, the parties weren’t required to confirm or deny the SEC’s allegations.
(A spokesperson for Lohan told NBC News that she had been “unaware of the disclosure requirement” but had “agreed to pay a fine to resolve the matter.” Representatives for Sun and the others charged did not immediately respond to requests for comment, while a spokesperson for Paul declined to comment.)
In recent years, several celebrities have faced consequences for touting cryptocurrencies to their followers without revealing that they were being paid as promoters. In many cases, they gave the impression that they were backing these — often worthless — cryptocurrencies as sound business investments ... and not as a sponsored ad.
Wednesday’s SEC announcement follows numerous cryptocurrency failures over the past year — the most highly publicized of which involved the collapse of FTX, a cryptocurrency exchange. I had already warned that cryptocurrency regulation was inevitably going to dash the hopes of crypto bros everywhere. And after the FTX crash, I noted that rich Wall Street capitalists were starting to sound like progressives with their demands for more federal scrutiny of the crypto world.
The SEC’s latest action is yet another sign that Judgment Day has come for the previously freewheeling crypto industry.