JOIN THE DISCUSSION Grygo is chief content officer for FTF.
It appears that the incredible power of celebrity combined with social media has the full attention of the SEC especially when it comes to endorsements of all things crypto-currency.
The SEC just announced that movie actor Steven Seagal, who is also a producer, screenwriter, martial artist, and musician, has agreed to a disgorgement and penalty for allegedly “failing to disclose payments he received for promoting an investment in an initial coin offering (ICO) conducted by Bitcoiin2Gen (B2G).”
Bitcoiin2Gen touts itself as the “World’s first self-sufficient crypto currency eco-system!” and as the crypto-currency for those who cannot afford the original Bitcoin (thus the extra “i” in its name).
Seagal promoted B2G “from approximately February 12, 2018 through March 6, 2018,” and particularly the ICO, according to the SEC.During the promotional period, “Seagal had approximately 107,000 Twitter followers and 6.7 million Facebook followers.”
Seagal has agreed to the SEC order without admitting or denying the SEC’s findings.
The regulator’s order specifies that Seagal “violated the anti-touting provisions of the federal securities laws.” He will be paying $157,000 in disgorgement, “which represents his actual promotional payments, plus prejudgment interest, and a $157,000 penalty,” according to the SEC.“In addition, Seagal agreed not to promote any securities, digital or otherwise, for three years.”
Perhaps no longer under siege, Seagal will be handing over $330,448.76 to the U.S.Treasury.
The crux of the case, argues the SEC, is 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 [initial coin offering] and a press release titled ‘Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen.’ ”
The promotion of the ICO “occurred nearly four months after the Commission’s Division of Enforcement and Office of Compliance Inspections and Examinations issued a public statement reminding market participants that 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, and that a failure to disclose this information is a violation of the anti-touting provisions of the federal securities laws,” according to the SEC order.Steven Seagal
Seagal’s spokesman, Christopher Nassif, has told The New York Times that while the 67-year-old actor had agreed to let Bitcoiin2Gen associates post via his social media sites he ultimately ended his affiliation with the firm and did not receive the full payment of his agreed fee.Nassif also points out that Seagal, a U.S.national who lives in Moscow, Russia, has been working with the regulator.
“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,” says Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit, in a prepared statement.
“Celebrities are not allowed to use their social media influence to tout securities without appropriately disclosing their compensation.”
I, personally, will keep Littman’s words in mind when I achieve celebrity status.
Until then, I will resist celebrities and think twice about crypto-currencies..
