Action star Steven Seagal has been fined by the U.S. Securities and Exchange Commission (SEC) for “unlawfully touting” an initial coin offering (ICO) conducted by Bitcoiin2Gen (B2G) in February 2018.
According to a statement published by the SEC, Seagal failed to disclose he was offered $250,000 in cash and an additional $750,000 worth of B2G tokens in exchanges for promoting the ICO. His promotion included telling his fans on social media to not “miss out” on Bitcoinn2Gen’s ICO, and a press release titled “Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen.”
The SEC details that one press released quoted Seagal saying he “wholeheartedly” endorsed the initial coin offering. The promotions came after, in 2017, the SEC warned that cryptoassets sold via ICOs could be securities, and after it advised that celebrities or other individuals who promote cryptoassets that are secure should “disclose the nature, scope, and amount of compensation” they receive for it.
Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, was quoted as saying:
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.
Littman added that celebrities aren’t allowed to use their social media influence to promote securities “without appropriately disclosing their compensation.” The release adds that without admitting or denying the SEC’s findings, Seagal agreed to pay $157,000 in disgorgement representing his actual promotional payments, plus prejudgement interest, and a $157,000 penalty.
Moreover, Seagal agreed to not promote any securities for three years. The SEC added at the end of the release that its Office of Investor Education and Advocacy cautions investors to be wary of celebrity endorsements and to always independently research any investment opportunity.
Other celebrities have been charged with “unlawfully promoting” ICOs, including boxing legend Floyd Mayweather and DJ and music producer DJ Khaled for “failing to disclose payments they received for promoting investments in initial coin offerings.”
Featured image via Pixabay.