Curriculum·G703 Disclosure Ethics and How Crypto Educators Get Compromised·about 31 min
Directed silence: when the sponsor tells you not to disclose
By the end of this lesson you can
- →State what the Commission alleged against Justin Sun's companies and the eight celebrities, including the instruction not to disclose
- →Explain why an instruction from the sponsor does not transfer the obligation, and who carries the violation when a promoter is told to stay silent
- →Compute the total the six settling celebrities paid against the payments alleged, and what the arithmetic says about the sponsor's side of the deal
- →Recognize the language a sponsor uses to obtain silence, and respond to it in a way that ends the arrangement rather than the disclosure
Graduate · enrolled learners
This lesson opens with SEC v. Justin Sun, Tron Foundation, BitTorrent Foundation, Rainberry, and eight celebrities, 22 March 2023.
- What happened
- The Commission charged Justin Sun and three of his companies with the unregistered offer and sale of Tronix and BitTorrent tokens and with manipulative wash trading, and separately charged eight celebrities, among them Lindsay Lohan, Jake Paul, Soulja Boy, Lil Yachty, Ne-Yo, Akon, Austin Mahone and Kendra Lust, with illegally touting the tokens without disclosing that they were paid. The complaint alleged that Sun and his companies paid the celebrities to promote the tokens on social media and directed them not to disclose the compensation. Lohan was paid $10,000 and Paul $25,000 for their posts, per the complaint. Six of the eight agreed to settle, without admitting or denying, for a combined total of more than $400,000 in disgorgement, interest and penalties. Two, Soulja Boy and Mahone, did not settle at the time.
- The decision point
- The sponsor did the paying and the sponsor did the instructing, and the promoters carried the charge anyway. An instruction not to disclose is not a defense; it is an admission that the sponsor knew what the disclosure would do to the promotion. A promoter who is told to stay silent has been told that the arrangement only works if the audience is misled, and the correct response is not to negotiate the wording of the disclosure but to end the arrangement. For an educator the instruction arrives more softly than it did here, as a request to keep it natural, to not make it about the sponsorship, to mention it in passing. The lesson is that the softness is the instruction, and that the person who follows it is the one charged.
- Recorded loss
- $400,000
What you will be able to answer
- →What did the Sun case allege about disclosure?
- →Does a sponsor's instruction not to disclose protect the promoter?
- →What does an instruction not to disclose tell you?
- →What does the soft version sound like?
Orientation and Year One are open: anyone can read them without an account. From Year Two onward the lessons are for enrolled learners, because progress through the later years only means anything if it is tracked against a record.
It is free. We do not sell the list and there is nothing to buy at the end of it.
Sources and review
- https://www.sec.gov/newsroom/press-releases/2023-59
- https://www.cnbc.com/2023/03/22/sec-hits-jake-paul-lindsey-lohan-justin-sun-with-crypto-violations.html
- https://www.npr.org/2023/03/22/1165477713/lindsay-lohan-jake-paul-sec-crypto
Confidence high·Volatility medium·Reviewed 2026-09-14·Owner unassigned
Contested
The charges against Sun and his companies were allegations in a complaint, contested, and the fraud and wash-trading counts are separate from the touting counts this lesson relies on. The celebrity settlements were without admission or denial. Later developments in the litigation against Sun are not relied on here.
The loss_usd figure is the combined celebrity settlement, not a public loss.