The US Securities and Exchange Commission has charged eight celebrities, including Lindsay Lohan, Jake Paul, Soulja Boy, Ne-Yo and Akon, for illegally promoted the crypto tokens Tronix and BitTorrent online without disclosing that it was a commercial advertisement.
“...Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically binding them to not disclose their agreement. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used,” Gurbir S. Grewal, director of the SEC’s division of enforcement, said in a statement.
According to the SEC, the two tokens sound familiar even to non-hardcore crypto enthusiasts, because of the social display of support by numerous famous personalities.
All celebrities charged, with the exception of Soulja Boy and musician Austin Mahone, have agreed to pay a collective amount of $400,000 in penalties to settle the charges.
Incidentally, it’s not the first time that the SEC went after celebrities for promoting crypto on social media — it previously charged reality TV star Kim Kardashian and NBA Hall of Famer Paul Pierce for posting about Ethereum MAX’s EMAX tokens in similar accusations.
Kardashian paid $1.26 million to settle the charges against her, while Pierce paid $1.4 million.
Bitcoin Tracks Equities Lower On Pessimistic Fed, Treasury Comments On Banks
As Bitcoin fell on Thursday morning in Asia along with most other top 10 non-Stablecoin cryptocurrencies. XRP led the losers, while Litecoin gained.
US equities fell after the Federal Reserve raised interest rates as expected on Wednesday but later said rates may vary, even as the US Treasury backed away from a blanket backstop for troubled banks.
Adding to crypto concerns is a lawsuit against crypto entrepreneur Justin Sun and a warning to the Coinbase exchange about some of its staking products.
Bitcoin Traders See $260 Millions In Future Liquidation
Bitcoin gradually moved to just under $28,000 on Thursday as traders digested the quarter-point interest rate raise on Wednesday by US Federal Open Market Committee (FOMC), in line with expectations.
The decision reinforced the Federal Reserve’s concerns that inflation remains problematic, and that it remains “strongly committed to returning inflation to our 2 per cent objective.”
Bitcoin slid under $27,000 immediately after FOMC, as traders took profits on a 20 per cent gain over a seven-day rolling period. However, traders of Bitcoin-tracked futures took on over $150 million in losses amid the volatility, with billions in open interest – or the number of unsettled contracts – effectively getting washed out.