SEC accuses Lindsay Lohan, Jake Paul, and the founder of Tron Justin Sun of cryptocurrency violations.

Justin Sun, a Grenadian diplomat and the founder of Tronix and BitTorrent, has been charged with fraud and unregistered securities violations by the Securities and Exchange Commission, along with separate violations against the famous investors in his Tronix and BitTorrent assets, including Jake Paul, Lindsay Lohan, and Soulja Boy.

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The SEC claimed that Sun committed fraud by faking active trading in the two coins while there was in fact no such trading going on. On the other hand, the SEC's accusations for unregistered offer and sale are comparable to those it has brought against other cryptocurrency companies and exchanges, including as Genesis, Gemini, and Do Kwon's Terraform Laboratories.

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According to SEC Chair Gary Gensler, this action "demonstrates once again the tremendous risk investors confront when cryptocurrencies securities are issued and sold without sufficient disclosure."

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Sun is accused of coordinating a publicity strategy in which he along with his celebrity promoters concealed the fact that celebrities were compensated for their tweets in order to persuade investors to buy TRX and BTT tokens.

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The eight influential people and celebrities were:

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• Lindsay Lohan, an actress
• Internet celebrity Jake Paul
• DeAndre Cortez Way, a musician also known as Soulja Boy
• Austin Mahone, a musician
• Michele Mason, a teen actress better known as Kendra Lust
• Miles Parks McCollum, a musician better known as Lil Yachty
• Shaffer Smith, a musician better known as Ne-Yo
• Aliaune Thiam, a musician also known as Akon

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All parties, with the exception of Mahone and Soulja Boy, consented to pay a total of $400,000 in disgorgement, interest, and penalties to resolve the allegations. Settlements did not constitute an admission of guilt or a denial of it.

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These Tron supporters would encourage people to join their Telegram and Discord channels by promoting the TRX and BTT tokens on social media.

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According to SEC enforcement officer Gurbir Grewal, Tron and his backers' alleged actions were part of a "age-old script to deceive and hurt investors."

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Although directly instructing them to withhold their payment, Sun also compensated celebrities with millions of followers on social media to promote the unregistered products. Irrespective of the labels Sun and others employed, this is the exact behavior that the federal disclosure rules were intended to guard against, according to Grewal.

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An inquiry for comment was not immediately answered by Sun's Tron representative.