Which Celebrities Are Facing Backlash for Crypto Promotion?
The most recent posts on Lindsay Lohan’s Twitter page are Christmas-themed advertisements from December for “Pilk,” a creamy, bubbly concoction of Pepsi and milk. The posts are clearly marked as promotions for Pepsi.
A less festive tweet by her in 2021, in which she promoted a crypto asset without disclosing that she had received payment for the post, has since attracted the scrutiny of federal regulators. A spokeswoman for Ms. Lohan said that the actor was unaware of the disclosure requirement and that she agreed to pay a fine after being contacted in March 2022.
The Securities and Exchange Commission announced charges on Wednesday against a group of eight celebrities, including Ms. Lohan, the influencer Jake Paul and the rapper Soulja Boy, for illegally touting crypto asset securities without disclosures of compensation. Six of the stars agreed to pay settlements adding up to $400,000.
Celebrities with great taste will not necessarily give solid guidance on investments, especially if they are making an undisclosed endorsement, said Andrew Verstein, an expert on business law at the University of California, Los Angeles.
“The problem is that you might be getting an investment that is unsound or that you don’t understand, or both,” he said.
These celebrities join the swelling ranks of famous people under scrutiny for promoting crypto without disclosing financial ties, and of the even more prodigious cohort of celebrities facing backlash for promoting risky investments to fans.
Who’s been charged so far?
Justin Sun: An entrepreneur who refers to himself as “His Excellency” on social media, Mr. Sun was charged with securities law violations linked to his management of three crypto companies.
No household name himself, he hyped his crypto projects — which included the digital coins TRX and BTT — by recruiting celebrity endorsers, according to the Securities and Exchange Commission.
Lindsay Lohan: “Super fast and 0 fee,” she posted, using language provided by Mr. Sun’s company Tron. “Good job @justinsuntron.” She received $10,000 to post about TRX, according to the S.E.C.
Akon: The “Smack That” singer promoted TRX on social media in exchange for about $42,000 worth of crypto assets. He is also a longtime blockchain enthusiast with his own cryptocurrency, Akoin.
Jake Paul: The social media influencer and boxer was charged with illegally touting Mr. Sun’s crypto asset securities. His brother, Logan Paul, previously promoted Dink Doink, a friend’s cryptocurrency, without revealing his personal connection. A spokesman for Jake Paul declined to comment.
The artists Lil Yachty, Soulja Boy, Austin Mahone, Kendra Lust and Ne-Yo have also been charged by the S.E.C. With the exception of Soulja Boy and Mr. Mahone, they settled.
Who has settled with the S.E.C. in the past?
Kim Kardashian: She posted about a crypto token on her Instagram in 2021. She then paid $1.26 million to settle charges that she was not forthcoming about being compensated for the post.
Floyd Mayweather: He has endorsed various specific and often dubious crypto investments. In 2018, he paid more than $600,000 to settle charges that he had failed to properly disclose his compensation for marketing initial coin offerings.
DJ Khaled: The music producer agreed to pay more than $150,000 after the S.E.C. found that he had failed to disclose a $50,000 payment from Centra Tech; he had touted it as a “Game changer.”
What other celebs got in the blockchain game? (So many!)
Larry David: Mr. David, donning historical garb, promoted FTX last year in a Super Bowl ad that has aged awkwardly.
Matt Damon: The actor shilled for Crypto.com in a “Museum of Bravery.”
Reese Witherspoon: She tweeted “Crypto is here to stay” in December 2021.
Paris Hilton: She named her lap dogs Crypto and Ether, writing, “Their names are an ode to my passion and love for #NFTs.”
Ben McKenzie: The aughts teen heartthrob from “The O.C.” has become an outspoken critic of crypto. “Don’t take financial advice from celebs, including me,” he tweeted last year.