In September 2021, the Securities and Exchange Commission (SEC) announced that it had reached a settlement with several celebrities, including Lindsay Lohan, over their involvement in promoting a cryptocurrency that was later found to be fraudulent. The settlement marks the end of a long-running legal battle that began in 2018, when the SEC first filed charges against the individuals involved.
The case centered around a cryptocurrency called Centra Tech, which was marketed as a revolutionary new payment system that would allow users to make purchases with digital currencies anywhere in the world. The company raised over $32 million from investors through an initial coin offering (ICO) in 2017, with the help of several high-profile celebrity endorsements.
However, it soon became clear that Centra Tech was not all it seemed. The SEC alleged that the company had made false and misleading statements about its business partnerships and technology, and that it had created fake executives to give the appearance of legitimacy. In reality, the company had no working product and no real partnerships.
The celebrities involved in promoting Centra Tech included boxer Floyd Mayweather Jr. and music producer DJ Khaled, as well as Lindsay Lohan. The SEC alleged that they had all received payments from Centra Tech in exchange for promoting the ICO on social media. Mayweather and Khaled settled with the SEC in 2018, agreeing to pay fines and promising not to promote any securities for a period of time.
Lindsay Lohan, however, initially fought the charges against her. She argued that she had only tweeted about Centra Tech once, and that she had not been paid for her endorsement. However, the SEC maintained that Lohan had received compensation in the form of Centra Tech tokens, which she had promoted on social media without disclosing her financial interest.
In the settlement reached in September 2021, Lohan agreed to pay $180,000 in fines and disgorgement of ill-gotten gains. She also agreed not to promote any securities for a period of three years. In a statement, Lohan’s lawyer said that she was “pleased to have this matter behind her.”
The settlement with Lohan brings an end to one of the most high-profile cases involving celebrity endorsements of cryptocurrencies. It serves as a reminder that even famous individuals can be held accountable for their actions when it comes to promoting investments. The SEC has been cracking down on fraudulent ICOs in recent years, and this case sends a clear message that anyone who promotes such offerings without disclosing their financial interests will face consequences.
