Jake Paul just took his second big loss of the year.
Not long after “The Problem Child” fell to boxing rival Tommy Fury in Dubai, thanks to a wet dream the night before the fight, Paul was one of eight celebrities charged for their respective roles as part of an illegal securities scheme orchestrated by crypto shyster Justin Sun.
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 pinched for duping their fans by “illegally touting” crypto asset securities Tronix (TRX) and BitTorrent (BTT) without disclosing their compensation.
Here’s a sample:
These were some of the paid tweets that were made without disclosure.
Lohan and Lil Yachty got $10,000, Ne-Yo got $12,000, and somehow Jake Paul got $25,000 for retweeting Lil Yachty. If I was Lil Yachty I’d be mad lol pic.twitter.com/MfcYvZyYRN
— web3 is going just great (@web3isgreat) March 22, 2023
“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.”
With the exception of Soulja Boy and Austin Mahone, Paul and the remaining celebrities agreed to pay more than $400,000 in disgorgement, interest, and penalties to settle the charges, without admitting or denying the SEC’s findings. Sun and his companies are facing much stiffer penalties after being charged with wash trading and fraud.
Paul has not commented on the charges.