Crypto Entrepreneur and Celebrity Promoters Face S.E.C. Charges

The Securities and Exchange Commission announced charges on Wednesday against a prominent cryptocurrency entrepreneur and a group of celebrities who promoted his ventures, including the actress Lindsay Lohan.

The S.E.C. filed a complaint in federal court in the Southern District of New York charging the entrepreneur, Justin Sun, with securities law violations linked to his management of three crypto companies. The agency also charged eight celebrities, including Ms. Lohan and the social media influencer Jake Paul, with illegally promoting Mr. Sun’s cryptocurrencies.

Ms. Lohan, Mr. Paul and four of the other celebrities agreed to pay a total of $400,000 to settle the charges.

The S.E.C. charges are the latest in a series of federal enforcement efforts targeting the crypto industry, which has faced mounting scrutiny in the nearly five months since the implosion of FTX, the exchange founded by Sam Bankman-Fried.

So far this year, the S.E.C. has levied fines and penalties against crypto lending firms and settled a case with Kraken, one of the largest American crypto exchanges. At the same time, federal banking regulators have expressed growing skepticism about crypto, raising the pressure on a freewheeling industry after a procession of bankruptcies and market meltdowns over the last year.

On Wednesday, the crypto exchange Coinbase announced that it had received a so-called Wells notice from the S.E.C., warning that the agency was planning on bringing an enforcement action against the company.