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Five musicians charged over involvement with illegal crypto scheme

By | Published on Thursday 23 March 2023


A number of musicians are among a list of celebrities that have been hit with charges from regulators in America over their involvement with a scheme to sell some good old crypto asset securities. Akon, Ne-Yo, Lil Yachty, Soulja Boy and Austin Mahone feature on a list of eight celebs targeted in an investigation carried out by the US Securities And Exchange Commission.

The SEC yesterday announced charges against Justin Sun, founder of the Tron Foundation Limited and three of his companies for the unregistered offer and sale of TRX and BTT crypto asset securities. Sun and his companies were also charged with fraudulently manipulating the secondary market for TRX, and for orchestrating a scheme to pay celebrities to promote TRX and BTT without disclosing their compensation.

“While we’re neutral about the technologies at issue, we’re anything but neutral when it comes to investor protection”, says Director of the SEC’s Division Of Enforcement, Gurbir Grewal. “As alleged in the complaint, Sun and others used an age-old playbook to mislead and harm investors by first offering securities without complying with registration and disclosure requirements, and then manipulating the market for those very securities”.

“At the same time”, he goes on, “Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used”.

As well as the five musicians involved, the other celebrities charged are actor Lindsay Lohan, YouTuber Jake Paul and porn star Kendra Lust. Six of those celebs – the exception being Soulja Boy and Austin Mahone – have already agreed to collectively pay $400,000 to settle the charges against them without admitting liability.