celebrities-facing-backlash-by-crypto-promotion?

Which Celebrities Are Getting Backlash for Promoting Cryptocurrencies?

Just two well-known Celebrities who have run into legal issues for promoting cryptocurrency on their social media profiles are Lindsay Lohan and Jake Paul.

The most recent tweets from Lindsay Lohan’s account are Christmas-themed promos from December for “Pilk,” a frothy, creamy drink made with Pepsi and milk.

Jake Paul

The boxer and social media star was accused of promoting Mr. Sun’s cryptocurrency asset security in violation of the law.

Who has been accused thus far?

Justin Sun

Justin Sun is an entrepreneur who goes by “His Excellency” on social media. He was accused of breaking securities laws while managing three cryptocurrency businesses.

According to the Securities and Exchange Commission, despite not being a household name, he promoted his cryptocurrency initiatives, which included the digital coins TRX and BTT, by enlisting the support of famous people.

Lindsay Lohan

Lindsay Lohan used wording from Mr. Sun’s business Tron to publish, saying, “Very quick and no cost.” “Well done, @justinsuntron.” The S.E.C. claims she got $10,000 for posting about TRX.

Akon

Akon: The singer of “Smack That” received almost $42,000 worth of cryptocurrency in exchange for promoting TRX on social media. Along with being an avid fan of blockchain technology, he also has his own cryptocurrency, Akoin.

Jake Paul

Jake Paul: The boxer and social media star was accused of promoting Mr. Sun’s cryptocurrency asset security in violation of the law. Logan Paul, his brother, previously advertised a friend’s cryptocurrency, Dink Doink, without disclosing his personal relationship. Jake Paul’s representative declined to comment.

The S.E.C. has also filed charges against singers Lil Yachty, Soulja Boy, Austin Mahone, Kendra Lust, and Ne-Yo. They all settled, save for Soulja Boy and Mr. Mahone.

Who has previously reached a settlement with the SEC?

Kim Kardashian

Kim Kardashian: In 2021, she shared a picture of a cryptocurrency token on Instagram. She subsequently settled allegations that she had withheld payment for the post by paying $1.26 million.

Floyd Mayweather

Floyd Mayweather: He has backed a number of niche and frequently questionable cryptocurrency ventures. He settled allegations that he had improperly disclosed his compensation for promoting initial coin offerings in 2018 by paying more than $600,000.

DJ Khaled

DJ Khaled: After the S.E.C. discovered that he had concealed a $50,000 payment from Centra Tech, which he had referred to as a “Game changer,” the music producer agreed to pay more than $150,000.

So what happened?

The posts are obviously advertisements for Pepsi. Federal officials have expressed interest in her less celebratory 2021 tweet, whereby she pushed a cryptocurrency asset without revealing that she was compensated for the message.

The star was not aware of the disclosure obligation, according to a representative for Ms. Lohan, and she consented to pay a fine after being contacted in March 2022.

Eight celebrities, including Ms. Lohan, influencer Jake Paul, and rapper Soulja Boy, were charged by the Securities and Exchange Commission on Wednesday for engaging in illicit marketing of cryptocurrency asset securities without providing compensation disclosures.

A total of $400,000. was agreed to by six of the celebrities as settlements. Well-dressed celebrities may not always offer wise advice on investments, particularly if they are endorsing a product behind closed doors, according to University of California, Los Angeles commercial law expert Andrew Verstein.

These celebrities join the growing list of well-known individuals under investigation for endorsing cryptocurrency without declaring financial affiliations, as well as the even more notable group of celebrities facing criticism for endorsing high-risk investments to their fan base.

So what is SEC?

The three basic goals of the SEC’s mandate are to safeguard investors, uphold just, efficient, and orderly markets, and encourage capital formation.

The SEC enforces the legal requirement that public businesses and other regulated companies file quarterly and yearly reports, in addition to other periodic reports, in order to fulfill its mandate. Company executives are required to submit yearly financial reports as well as a narrative account that summarizes the prior year’s operations and describes how the business performed during that time. This is known as the “management discussion and analysis” (MD&A).

Typically, MD&A will also discuss the following year, including future objectives and strategies for launching new initiatives.

The SEC maintains an online database known as EDGAR (the Electronic Data Gathering, Analysis, and Retrieval system) from which investors can access this and other information filed with the agency in an effort to level the playing field for all investors.

Investors need to read public firms’ quarterly and semiannual reports in order to make informed judgments while investing in the capital markets. The federal government does not guarantee investments made in the capital markets, in contrast to banking.

It is necessary to balance the possibility of substantial losses with that of huge gains.

By providing major institutions and private investors with the same fundamental information about the public companies they invest in, mandatory disclosure of financial and other information about the issuer and the securities itself increases public scrutiny and decreases insider trading and fraud.

Reports are made publicly available by the SEC via the EDGAR system. Public education publications on investment-related subjects are also provided by the SEC.

In order to assist the SEC in finding securities law violators, investors can also submit tips and complaints through the same online portal. It is strictly forbidden for the SEC to remark on the presence or progress of an ongoing inquiry.

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