The U.S. Securities and Exchange Commission (SEC) has charged actor Steven Seagal for unlawfully promoting a cryptocurrency investment scheme claiming to be “the next generation of bitcoin.” Seagal failed to disclose that he was being compensated in cash and crypto by Bitcoiin2gen, or B2G, for marketing its token offering, such as on Twitter and Facebook.
SEC Charges Stevel Seagal for Unlawful Crypto Promotion
The SEC announced Thursday that it has settled charges against Hollywood actor and producer Steven Seagal over his promotion of a cryptocurrency investment product. The SEC explained that Seagal “touted on social media a security that was being offered and sold in an initial coin offering (ICO) without disclosing that the issuer was paying him for the promotions.” The offering was conducted by Bitcoiin2gen, also known as B2G. Noting that the actor violated the Securities Act, the Commission elaborated:
Seagal failed to disclose he was promised $250,000 in cash and $750,000 worth of B2G tokens in exchange for his promotions, which included posts on his public social media accounts encouraging the public not to ‘miss out’ on Bitcoiin2gen’s ICO and a press release titled ‘Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2gen.’
“The SEC’s order finds that Seagal violated the anti-touting provisions of the federal securities laws. Without admitting or denying the SEC’s findings, Seagal agreed to pay $157,000 in disgorgement, which represents his actual promotional payments, plus prejudgment interest, and a $157,000 penalty. In addition, Seagal agreed not to promote any securities, digital or otherwise, for three years,” the agency clarified.
Steven Seagal for ‘the Next Generation of Bitcoin’
Steven Seagal earned his net worth as a big action movie star of the 1980s and 90s. He appeared in more than 50 films, including Above the Law, Hard to Kill, Out for Justice, Under Siege, and Out of Reach. Seagal’s net worth is now $16 million, according to celebritynetworth.com. The 67-year-old currently lives in Moscow, Russia. President Vladimir Putin presented a Russian passport to him in 2016.
According to the SEC’s order, from about Feb. 12 to March 6, 2018, Seagal touted the B2G cryptocurrency investment opportunity on his Twitter and Facebook accounts. At the time, he had approximately 107,000 followers on Twitter and 6.7 million on Facebook. While he was not running the ICO, Seagal allowed his pictures to be used on Bitcoiin2gen’s official website and marketing materials. He additionally received payments for participating in a webinar with potential investments.
Bitcoiin2gen described its B2G tokens as “the next generation of bitcoin,” the SEC wrote. Its marketing materials say “Bitcoiin – 2nd Generation. Bigger and better than the original.” The company claimed that the funds raised would be used to “build an ‘ecosystem’ that would allow users to trade B2G tokens, provide wallet staking, and trade altcoins and fiat currencies, all ‘on a secure, comprehensive platform,’” the SEC described, noting:
Participants in the ICO invested bitcoin, U.S. dollars, euros, or made payments via credit card in exchange for B2G tokens.
The SEC further pointed out that Bitcoiin2gen’s press release included a quote from Seagal stating that he endorsed the token offering “wholeheartedly.” Noting that these promotions came six months after its DAO Report warning that cryptocurrencies sold in ICOs may be securities, the SEC emphasized that “in accordance with the anti-touting provisions of the federal securities laws, any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion.” Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, clarified:
These investors were entitled to know about payments Seagal received or was promised to endorse this investment so they could decide whether he may be biased. Celebrities are not allowed to use their social media influence to tout securities without appropriately disclosing their compensation.
What do you think of the SEC charging Steven Seagal for promoting a cryptocurrency investment scheme without disclosing compensation? Let us know in the comments section below.
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Images courtesy of Shutterstock, CNN, and Bitcoiin2gen.
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Source: Bitcoin News