Soulja Boy and Austin Mahone are two names in music you may not have heard in a while. After a bid to stay relevant by chasing the crypto bubble before it burst, the two musicians are now in the crosshairs of the Securities and Exchange Committee after their efforts to promote Tronix cryptocurrency.
Protos reports that Mahone and Soulja Boy, whose name is DeAndre Cortez Way, lost a lawsuit filed in March by the SEC. The lawsuit also named Justin Sun, a crypto entrepreneur who founded the Tronix cryptocurrency and its operating system TRON. Sun also acquired BitTorrent in 2018. Mahone and Way were sued for advertising Tronix without disclosing that they’d been paid. Mahone reportedly has a year to pay the SEC the $7,507 he was paid by Sun’s company as well as $682 interest, in addition to a $37,535 fine from the commission.
“This case demonstrates again the high-risk investors face when crypto asset securities are offered and sold without proper disclosure,” SEC Chair Gary Gensler said in a press release in March. “As alleged, Sun and his companies not only targeted U.S. investors in their unregistered offers and sales, generating millions in illegal proceeds at the expense of investors, but they also coordinated wash trading on an unregistered trading platform to create the misleading appearance of active trading in [Tronix].”
Way, on the other hand, has simply not responded to the SEC, therefore his total fine is currently unknown. The lawsuit also names actress Lindsay Lohan, influencer-turned-boxer Jake Paul, adult film actress Kendra Lust, rapper Lil Yachty, and R&B singer-songwriters Akon and Ne-Yo.
The lawsuit and subsequent charges are yet another example of the SEC clamping down on the crypto hype after the bubble has arguably popped. Samuel Bankman-Fried of the defunct FTX was the SEC’s crypto white whale after the crypto exchange imploded in spectacular fashion last fall. The commission charged Bankman-Fried in December 2022 with using customer funds from FTX to fund his financing arm Alameda Research.