The Securities and Exchange Commission has charged cryptocurrency entrepreneur Justin Sun with fraud for manipulating the value of several crypto tokens and selling unregistered securities. Simultaneously, the SEC has charged Lindsay Lohan, Jake Paul and a roster of other celebrities for touting Sun’s tokens.
In a March 22 press release, the SEC announced its charges against Sun, the Tron Foundation, the BitTorrent Foundation and BitTorrent over the sale of Tronix (TRX) and BitTorrent (BTT) tokens, which the SEC claims are unregistered securities.
The SEC alleges that Sun and his companies sold TRX and BTT as investments through multiple unregistered “bounty programs,” which rewarded prominent celebrities and influencers for promoting the tokens on social media.
In an even more serious charge, the regulator alleged that the defendants “fraudulently manipulated” trading in secondary markets through an extensive wash trading scheme.
Celebrities Charged for Touting Crypto
The eight celebrities and influencers charged by the SEC included the following:

Lindsay Lohan
Jake Paul
DeAndre Cortez Way, also known as Soulja Boy
Austin Mahone
Michele Mason, commonly known as Kendra Lust
Miles Parks McCollum, aka Lil Yachty
Shaffer Smith, known as Ne-Yo
Aliaune Thiam, also known as Akon

With the exception of Way and Mahone, the figures listed above agreed to pay a collective $400,000 in disgorgement, interest and penalties to settle the SEC charges.
The Dirty Business of Crypto Wash Sales
In the world of crypto fraud, wash trading is a common market manipulation technique. A company or entity trades with itself to artificially boost prices or provide the illusion of liquidity to a coin or token. The goal is to deceive other investors and entice them to buy at inflated prices.
In a December 2022 working paper, researchers at the National Bureau of Economic Research (NBER) found that wash trades accounted for up to 70% of all transactions in a group of 29 crypto exchanges, suggesting most trades on these platforms are fraudulent.
The SEC alleged that Sun and his companies manipulated the trading activity of TRX tokens, creating the appearance of active trading when it did not in fact exist.
“As alleged, Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in TRX,” said SEC Chair Gary Gensler.
The unregistered securities charges are similar to ones the SEC has unveiled against other crypto offerings and exchanges, including Genesis, Gemini and Do Kwon’s Terraform Labs.
“While we’re neutral about the technologies at issue, we’re anything but neutral when it comes to investor protection,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “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.”