SEC charges Jake Paul for his involvement in illegal cryptocurrency scheme

The SEC has charged Jake Paul for his involvement in an illegal cryptocurrency scheme.

First, it was Jake Paul being defeated by boxing rival Tommy Fury in Dubai this past February. And now, it has been revealed that the 6-1 boxer has been charged by the U.S. Securities and Exchange Commission in a cryptocurrency scheme.

Jake Paul, along with 7 other celebrities, including Lindsay Lohan, DeAndre Cortez Way (Soulja Boy), Austin Mahone, Michele Mason (Kendra Lust), Miles Parks McCollum (Lil Yachty), Shaffer Smith (Ne-Yo), and Aliaune Thiam (Akon) have all been charged for duping their fans by ‘illegally touting’ crypto asset securities Tronix (TRX) and BitTorrent (BTT) without disclosing their compensation.

The filing cited Jake Paul’s tweet on Feb. 12, 2021, in which he promoted Tronix (TRX) tokens. The tokens are securities publicly offered by Tron Foundation Limited, which the filing indicated is owned by Yuchen “Justin” Sun, who was tagged in the tweet.

Gurbir S. Grewal, Director of SEC’s Division of Enforcement, issued the following statement:

“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. At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they do not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”

Paul and the other celebrities (with the exception of Soulja Boy and Austin Mahone) agreed to pay more than $400K in disgorgement, interest and penalties to settle the charges. Sun and his companies will face much stiffer penalties for wash trading and fraud.

Jake Paul has yet to comment on the charges.