- Actor and martial arts performer Steven Seagal has been charged by the US Securities and Exchange Commission (SEC) for failing to disclosed earnings from an initial coin offering (ICO) back in 2018.
The United States' Securities and Exchange Commission (SEC) released a statement this Thursday, in which it states that the actor – Steven Seagal – failed to disclose payments he received for promoting Bitcoiin2Gen’s (B2G) token and Initial Coin Offering (ICO) in February 2018.
The actor and former martial arts performer faced charges for failing to disclose that he had been offered a $250,000 payment in cash and another $750,000 in B2G tokens for promoting the ICO.
Seagal ‘Zen Master' Promoted B2G on Social Media
According to the SEC, Seagal took to social media, encouraging his fans and followers to invest in B2G tokens back in 2018.
The SEC also reported that he issued a press release titled: “Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen”, while another B2G press release quoted him saying that “he wholeheartedly backs the ICO” advising followers to invest to avoid “miss[ing] out.”
Celebrities: Promoting Securities? Disclose Your Compensation
Kristina Littman, speaking on behalf of the SEC's Enforcement Division Cyber Unit as its chief said the following:
“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.”
Meanwhile, B2G Fights Against Pyramid Scheme Accusations
Even when the ICO was launched, B2G fought an uphill struggle against accusations that it was a pyramid scheme. So much so that it issued statements about its marketing activity.
After a month, the Tennessee Department of Commerce and Insurance issued a warning about B2G's token project. The SEC had previously advised celebrities to not endorse tokens if they are legally deemed securities.
In an announcement released on Thursday 27th February, it stated that promoters “must disclose the nature, scope, and total amount of compensation received in exchange for their promotion”.
Actor Steven Seagal charged with unlawfully touting digital asset offering https://t.co/7etGWM0hVu
— SEC_News (@SEC_News) February 27, 2020
Seagal to Pay $157,000 in Disgorgement
The SEC stated that Seagal didn’t respect the anti-touting provisions of federal securities and that he agreed to pay $157,000 in disgorgement.
While he didn’t have to admit or deny any wrongdoing, Seagal agreed to no longer be directly involved in the promotion of securities for a period of 3 years.
His promotional payments are covered by this disgorgement and the investigation will continue, the SEC concluded.