The Securities and Exchange Commission (SEC) has filed a lawsuit against Justin Sun and three other well-known celebrities, Lindsay Lohan, Jake Paul, and Soulja Boy for their part in a crypto scheme. The SEC has alleged involvement in a crypto scam and has accused them of participating in a fraudulent unregistered offering of digital asset securities.
According to the official SEC statement, Sun, Lohan, Paul, and Soulja Boy were among those who promoted and invested in the initial coin offering (ICO) that purported to raise funds for a blockchain project known as Tron. The project never took off, and the funds were allegedly used for personal benefit instead of the promised blockchain development.
The SEC alleges that Sun had promised investors that their investments in the ICO would receive high returns, leading to many investors feeling deceived. The SEC also claims that the fraudulent funds were transferred to accounts, managed or controlled by Sun, to purchase digital assets such as Bitcoin, for Sun’s personal gain.
Lohan, Paul, and Soulja Boy were all reportedly involved in promoting the ICO and promised investors high returns. They are accused of personally receiving payments from the allegedly misappropriated funds.
The SEC’s complaint seeks injunctive relief, disgorgement of ill-gotten gains, and civil penalties for all four individuals. If found guilty, Justin Sun could face a fine of up to $30 million and up to five years’ imprisonment.
The SEC’s action is not just targeted at Sun, but is also aimed at holding celebrities responsible for their involvement in scams. The SEC’s Director of Enforcement noted that “The Commission seeks to protect retail investors from being misled by celebrities touting digital asset securities offerings on social media, as well as by those who compensate them for such endorsements”.
This lawsuit serves as a strong reminder that it is never a wise idea to fall prey to self-proclaimed cryptocurrency “gurus”, regardless of their level of fame or notoriety. It takes knowledge, due diligence, and well-thought-out decisions to truly understand the crypto market.