If you were to list things that have been in the news lately for all the wrong reasons, “crypto” would have to be near the top of that list. Whether it’s because of the legal matters surrounding FTX, how crypto investments tie into the state of the economy, or how the NFT market pushing its way into children’s television programming, it’s a massively complex world that major companies are eager to get people involved in. To that end, a number of celebrities have been involved in the marketing of crypto currency and due to the nature of said involvement, the federal government is not happy.
So the nature of advertising is a messy business when it comes to legalities. It becomes even messier when the product or service in question is a monetary investment. This is where jurisdiction isn’t so much with the FCC but the SEC, the US Securities and Exchange Commission. If a celebrity starts posting about their involvement in an investment, it’s going to potentially draw people into said investment. But what if that celebrity isn’t really involved, they’re just paid to post about the investment and they never disclose that they were paid?
The SEC says Lindsay Lohan, Jake Paul, Akon, and others (including Soulja Boy, because of course he’s involved) are guilty of. It’s being alleged that Justin Sun, a crypto entrepreneur and founder of the Tron blockchain system paid several celebrities to push his Tronix and BitTorrent tokens. The allegations continue to allege that not only were these celebrities compensated for their endorsements, but that Sun informed them not to disclose that they were being paid. This would be in direct violation of the SEC’s rules about the marketing of investment opportunities.
Of the celebrities involved in the scandal, only two of them have yet to settle with the SEC, singer Ausin Mahone and Soulja Boy. Between Lohan, Paul, and the others who settled without admitting or denying that a crime was committed, the SEC took in about $400,000 in fines. Regardless of whether they disclosed their compensation or not it’s probably worth mentioning that taking investment advice from celebrities who have nothing to do with economic policy is probably a bad idea no matter what.