The U.S. Securities and Exchange Commission (SEC) announced on Thursday that is has settled charges with action film actor Steven Seagal, who allegedly failed to disclose payments he received in connection with an initial coin offering (ICO).
Seagal was the notable promoter of a cryptocurrency called Bitcoiin (B2G) in early 2018, as CoinDesk reported at the time. Bitcoiin's backers promised "considerable profit from holding Bitcoiin (B2G)" in connection with a staking scheme. Seagal's involvement as a promoter was said to end once the ICO was complete.
"The SEC's order finds that 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 agency said on Thursday.
Per the order published alongside the statement, the SEC considers the B2G token to be a security. According to the document, B2G's backers "offered and sold tokens that were investment contracts and therefore securities pursuant to Section 2(a)(1) of the Securities Act. B2G described B2G tokens as 'the next generation of Bitcoin.'"
The SEC's investigation is ongoing, according to the agency.
As part of the agreement, according to the SEC's statement, Seagal did not confirm or deny 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 added.
"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," said Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit. "Celebrities are not allowed to use their social media influence to tout securities without appropriately disclosing their compensation."
The SEC issued a warning in November 2017, essentially warning celebrities about endorsing ICOs without correctly disclosing any financial compensation they might have received. A year later, the agency settled charges with heavyweight boxer Floyd Mayweather, Jr. and music producer DJ Khaled related to their endorsement of ICOs.
According to data from CoinMarketCap, Bitcoiin, or B2G, is currently priced at $0.000182 with roughly $55 in 24-hour volume during the past across two exchanges.