Actress Lindsay Lohan has become the latest high-profile figure named in a Securities and Exchange Commission action over promoting crypto assets on social media without disclosing any sponsorship or compensation. The case places her among a wider group of eight celebrities who allegedly helped push certain crypto assets to their followers by omitting required sponsorship disclosures.
The defendants include a singer, a boxer, a few rappers, and other performers who were accused of promoting the tokens Tronix (TRX) and BitTorrent (BTT) without proper paperwork. In a coordinated settlement, most parties agreed to pay more than $400,000 in total to resolve the charges, while a few, including the singer Mahone and one of the rappers Soulja Boy, chose to settle without admitting or denying guilt. The arrangement reflects a broader crackdown on undisclosed crypto endorsements that the SEC says misled retail investors.
At the center of the action is Justin Sun, founder and owner of the Tron, BitTorrent, and Rainberry platforms. The regulator alleges that Sun manipulated trading activity to inflate TRX volume and orchestrated a scheme to obscure the sponsorship behind promotional content. The SEC asserts that Sun and his companies offered and sold TRX and BTT as investments through pyramid-like programs that trained and directed promoters to amplify messages on social networks, create BitTorrent accounts, and recruit others via channels such as Telegram and Discord in exchange for additional crypto rewards.
Between 2018 and 2019, the SEC says certain Sun-affiliated entities processed about 600,000 illegal TRX transactions across the Tron and BitTorrent ecosystems. This activity purportedly created artificial trading volume and enabled the sale of the crypto asset on secondary markets without proper registration, netting roughly $31 million for the promoters and the corporate entities involved.
The regulator’s complaint frames the case as a test of regulatory transparency and investor protection in a volatile market where promotional incentives can blur the line between endorsement and compensated advertising. SEC Chair Gary Gensler stressed that the example illustrates the risk investors face when crypto assets are marketed without clear disclosures and governance. The speech and statements around the matter have underscored the ongoing push for better disclosure standards and registration requirements for digital asset offerings that cross the line into securities.
Earlier actions by the SEC highlighted a similar pattern with two other high-profile cases: Kardashian’s $1.26 million penalty for promoting a crypto asset and former NBA star Paul Pierce’s $1.4 million settlement related to similar promotional activities. Those settlements, like the current case, emphasize the agency’s focus on celebrities and influencers whose social reach can significantly sway investor behavior without the guardrails of disclosure and accountability.
The broader signal from these actions is that celebrity endorsements in the crypto space are under heightened scrutiny. The SEC has signaled willingness to pursue even more individuals and entities when promotional content resembles investment solicitation without clear sponsorship disclosures. The message is clear: promotions tied to financial products must come with transparent disclosures and verifiable registration, or risk enforcement actions and penalties that could affect both the individuals involved and the entities behind the campaigns.
Industry observers note that the evolving enforcement landscape is pushing platforms and marketers to tighten compliance. As the market continues to innovate, so too must the rules that govern how information about high-risk assets is presented to everyday investors. The SEC’s actions serve as a reminder that credibility, transparency, and regulatory alignment are essential in crypto promotions, especially when the audience includes millions of potential investors across North America.