In a recent development reported by Protos, pop sensation Mahone and renowned rapper Soulja Boy, legally known as DeAndre Cortez Way, have suffered a legal setback in a lawsuit filed against them by the U.S. Securities and Exchange Commission (SEC) back in March. The lawsuit, which also implicated crypto entrepreneur Justin Sun, founder of Tronix cryptocurrency and TRON operating system, and the 2018 BitTorrent acquirer, accused Mahone and Way of promoting Tronix without proper disclosure of financial arrangements.
Mahone is now facing a deadline of one year to repay the SEC the sum of $7,507 he received from Sun’s company, along with an additional $682 in interest. Additionally, he has been slapped with a $37,535 fine by the commission.
SEC Chair Gary Gensler emphasized the risks faced by investors when crypto assets are offered without adequate transparency. In a press release from March, Gensler stated, “This case demonstrates again the high-risk investors face when crypto asset securities are offered and sold without proper disclosure. 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].”
In stark contrast, DeAndre Cortez Way has not responded to the SEC, leaving his total fine undisclosed at present. The lawsuit has also roped in notable figures such as 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.
This legal action and the subsequent charges are a continuation of the SEC’s rigorous oversight of the cryptocurrency industry following the perceived burst of the crypto bubble. Samuel Bankman-Fried of the now-defunct FTX exchange emerged as a focal point for the SEC after the exchange’s dramatic fall last autumn. The commission accused Bankman-Fried in December 2022 of using customer funds from FTX to support his financing arm, Alameda Research.