Five music stars were accused by the U.S. Securities and Exchange Commission on Wednesday of illegally promoting crypto assets.
Austin Mahone, Soulja Boy, Ne-Yo, Akon and Lil Yachty were charged with endorsing the Tronix and BitTorrent crypto assets of Justin Sun, who has been charged with fraud.
SEC chair Gary Gensler said, in a release, that Sun “induced investors to purchase TRX and BTT by orchestrating a promotional campaign in which he and his celebrity promoters hid the fact that the celebrities were paid for their tweets.
"Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation."
The SEC release noted that all of the artists, with the exception of Mahone and Soulja Boy, "agreed to pay a total of more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings." (Other celebrities who settled were actress Lindsay Lohan, social media personality Jake Paul and adult star Kendra Lust.)
“This case demonstrates again the high risk investors face when crypto asset securities are offered and sold without proper disclosure,” said Gensler.