With the exception of Soulja Boy and Mahone, the celebrities paid a total of more than $400,000 in disgorgement, interest, and penalties to settle the charges without admitting or denying them.
Lindsay Lohan, Jake Paul, and other celebrities charged for illegally touting Justin Sun's tokens
Celebrities Lindsay Lohan, Jake Paul, Soulja Boy, Austin Mahone, Kendra Lust, Lil Yachty, Ne-Yo, and Akon were all charged by the SEC for violating anti-touting laws that would require them to disclose if and how much they were being paid to promote securities. The alleged securities in question are TRX and BTT, two tokens both closely tied to Justin Sun, who was also charged in relation to the scheme.
Animoon rug pulls for $6.3 million
Animoon is yet another Pokémon rip-off NFT project, with artwork that was ripped directly from Pokémon artwork and recolored. They claim to have a "signed NDA" with Pokémon (whatever that means), though it seems extremely unlikely that there's any real agreement granting them rights to use Pokémon IP.
Not only did their roadmap include play-to-earn game (of course), collaborations with a Swiss shoe and apparel store that would send them actual gear, and real-life trips, but they promised that 15 "legendary" cards would "automatically generate" their owners $2,500 each month, for life. The project was promoted by Jake Paul, an influencer whose crypto promotions don't have a great track record to say the least.
The project team began to grow more distant after launch, posting less frequently. Promised apparel shipments never arrived. The team changed the legendary rewards from $2,500 a month to "a percentage of incomes from the game", which they said "could be a lot more than $2500 monthly" despite no game actually existing. The project team eventually disappeared, took down the Twitter account and website, and disabled the general chat in their Discord project.
Creator of apparent $21 million Bored Bunny rug pull miraculously resurfaces following DOJ action against a different rug pull
Many had written off the Bored Bunny NFT project (and its subsequent spin-off NFT collections) as a rug pull. After releasing several new NFT collections that appeared to be little more than cash grabs, each less popular than the last, the team behind the project grew increasingly distant until going silent for over a month. Meanwhile, the team had pocketed over $21 million, largely thanks to the popularity the project had drummed up through influencer promotions from the likes of Jake Paul and Floyd Mayweather (both of whom, incidentally, are facing separate class-action lawsuits alleging impropriety in their promotions of crypto projects).
Suddenly, the project creator resurfaced on March 29, with a tweet claiming that he had been absent for a month because he had been... reading emails. The team then announced they would be handing the project reins over to a community member, though there was no mention of the $21.1 million that had already been pocketed by the original team.
The unexpected return came only days after the U.S. Department of Justice announced charges against two perpetrators of a different NFT rug pull, in which they stated unequivocally that "the same rules apply to an investment in an NFT or a real estate development. You can't solicit funds for a business opportunity, abandon that business and abscond with money investors provided you."
Influencer Jake Paul alleged to be repeatedly promoting projects without disclosing his financial involvement
Jake Paul, who is already in hot water after being named in the class-action lawsuit against SafeMoon, has now been implicated by YouTube detective CoffeeZilla in $2.2 million worth of undisclosed promotions for multiple different projects. Influencers are required by the FTC to disclose when they financially benefit from promoting a project, though the crypto space seems rife with celebrities deciding that rule just doesn't apply.
Paul allegedly tried to cover his steps by creating a new crypto wallet to receive payments for each promotion, but then transferred the money a wallet he controlled to cash out. Oops. Some of the projects that Paul hyped in his undisclosed promotions included League of Sacred Devils, $MILF, and $YUMMY.
- "Exposing Jake Paul's Scams", YouTube video by CoffeeZilla
Class action lawsuit names SafeMoon, its executives, Jake Paul, Nick Carter, and others in alleged pump-and-dump scheme
A class action suit was filed against SafeMoon, various executives, and a handful of influencers and celebrities who promoted the token. The plaintiffs allege that promotions included false or misleading statements, and that the defendants misrepresented their control over SafeMoon and its tokens in what is commonly called a "pump and dump". In addition to SafeMoon and its executives, the lawsuit named various celebrities and influencers who had promoted the token to their followers: Jake Paul, Nick Carter, Soulja Boy, Ben Phillips, and Lil Yachty. Promotions by the influencers occurred primarily between March and May 2021, and helped the coin spike to its all-time-highs of about $0.000008. However, the coin has spent most of its history worth less than half or, more lately, a quarter of that amount. The token underwent a migration in early 2022, which increased the price per token, but the value has continued to decrease.
These influencers join a growing list of celebrities who have been named in class action suits over alleged pump-and-dumps. The list includes names like Kim Kardashian, who was named among others in a January class action suit pertaining to a coin called EthereumMAX.
- "Jake Paul, Nick Carter, Soulja Boy, Lil Yachty Facing ‘Pump and Dump’ Class Action Over SafeMoon Tokens", ClassAction.org
- "I UNCOVERED A BILLION DOLLAR FRAUD", CoffeeZilla's YouTube channel