Hollywood actor Steven Seagal reached a settlement agreement with the Securities and Exchange Commission (SEC), which accused him of unlawful promotion of an initial coin offering (ICO).
According to the SEC, Seagal served as the brand ambassador of Bitcoiin2Gen (B2G), an international online company that aims to become more superior and advanced than the original version of bitcoin.
The federal securities regulator found that Seagal encouraged the public to invest in B2G ICO between February and March 26, 2018. He specifically promoted the ICO on his social media accounts. A Bitcoiin2Gen press release included a quotation from the actor stating; “I endorse this opportunity wholeheartedly…. I am excited about the management, and especially about the secure blockchain, underlying mining technology, and safeguards.”
Seagal violated the anti-touting provisions of the federal securities laws
Additionally, the SEC found that Bitcoiin2Gen paid $250,000 in cash and $750,000 worth of B2G tokens to Seagal for endorsing the ICO. The actor failed to disclose the payment he received for his promotions, a violation of the anti-touting provisions of the federal securities laws.
Seagal promoted the BTG ICO six months after the SEC released its 2017 DAO Report warning that digital coins sold in ICOs are considered securities. The Commission also advised any celebrity or individual who promotes a digital coin or token to disclose the nature, scope, and amount of compensation received in exchange for their promotion.
To resolve the allegations against him, Seagal agreed to pay a total of $330,448 monetary judgment including $157,000 in disgorgement plus $16,448 prejudgment interest and a $157,000 penalty. The actor also agreed that he will not promote any securities or digital assets for three years.
In a statement, SEC Enforcement Division, Cyber Unit Chief Kristina Littman said, “Celebrities are not allowed to use their social media influence to tout securities without appropriately disclosing their compensation.” She added that Seagal has the responsibility to inform investors about the payments he received for endorsing the investment. The actor’s disclosure is important for investors to decide whether he may be biased in promoting the B2G ICO.