Jake Paul has just suffered another significant setback this year. Paul was one of eight celebrities prosecuted for their roles in an illegal securities operation coordinated by crypto shyster Justin Sun. The charges came shortly after “The Problem Child” was defeated by boxing opponent Tommy Fury in Dubai.
Paul, along with 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), were charged with deceiving their fans by “illegally touting” crypto asset securities Tronix (TRX) and BitTorrent (BTT) without revealing that they were compensated for doing so.
In order to reach a settlement with the SEC, Paul and the other celebrities, apart from Soulja Boy and Austin Mahone, consented to pay more than $400,000 in disgorgement, interest, and penalties. They did this without admitting or trying to deny the SEC’s findings. As Sun and his businesses have been accused of wash trading and fraud, the fines they face have increased significantly. As of the time that this report was published, Paul has not provided a response to the allegations.
Specifically, the SEC states as follows:
“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,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they 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.”