Jake Paul, the renowned fighter, social media celebrity, and co-founder of Betr, accepted to pay more than $100,000 to the US Securities and Exchange Commission, due to the Commission’s allegations of his illegal promotion of cryptocurrencies.
On Wednesday, Paul, who was seen at a press conference in Saudi Arabia recently promoting his bout with Tommy Fury, agreed to reimburse the SEC for the value of the cryptocurrency he had been compensated to endorse without revealing this information to his 4 million followers. In addition to this, he also consented to pay interest and a civil penalty of more than $75,000. For three years, Paul has agreed not to accept any remuneration, covert or overt, from anyone connected to a cryptocurrency in exchange for advertising it.
The SEC’s filing in a New York federal court against Justin Sun and three of his companies included eight other celebs, such as actress Lindsay Lohan, and rappers Soulja Boy, Lil Yachty, Ne-Yo, and Akon, who all publicly endorsed Tronix or BitTorrent, but neglected to disclose their payment. These charges were a part of the SEC’s larger complaint accusing Sun and his companies of selling unregistered crypto assets, manipulating markets for Tronix, and devising the scheme to pay celebrities without revealing the compensation.
Gurbir S. Grewal, director of the SEC’s Division of Enforcement, said in a statement, “At the same time, Sun paid celebrities with millions of social media followers to tout the unregistered offerings, while specifically directing that they not disclose their compensation. This is the very conduct that the federal securities laws were designed to protect against regardless of the labels Sun and others used.”
The combined settlement of the six celebrities who agreed to pay without admitting or denying guilt amounted to more than $400,000.
Last August, Paul and entrepreneur Joey Levy had announced the formation of Betr, a sportsbook which would focus on microbetting – or in-game – markets and intended to target more casual sports bettors. The venture was funded with more than $50 million. Paul’s primary concentration with Betr has been connected to its original content, which is how the online sports betting operator has sought to gain customers. Following its launch in Ohio in January, Betr has also been approved licenses in Massachusetts and Virginia. This month, the platform declared it would start offering pregame markets, which are generally found on traditional sportsbooks.