SEC Takes Down Seagal For Unlawful Cryptocurrency Promotion
March 3, 2020
Steven Seagal may have thought that his Buddhist-mojo and Hollywood-bubble would place him Above the Law but the reality could not have been further from the truth as he found himself Under Siege by the United States Securities and Exchange Commission (SEC) for unlawfully promoting investment in an Initial Coin Offering (ICO).
$1 Million Fumble
In a 2018 press release the ICO in question, Bitcoiin2Gen (which trades as B2G), announced that Seagal had become a brand ambassador for the new and improved take on Bitcoin because it aligned with his beliefs and morals:
“As a Buddhist, Zen teacher, and healer, Steven lives by the principles that the development of the physical self is essential to protect the spiritual man. He believes that what he does in his life is about leading people into contemplation to wake them up and enlighten them in some manner. These are precisely the objectives of the Bitcoiin2Gen…”
What Seagal, and Bitcoiin2Gen by extension, failed to make public is that in addition to their spiritual alignment they had also come to a financial understanding. Seagal was set to receive $250,000 in cash plus $750,000 in B2G cryptocurrency.
In order to protect potential investors in cryptocurrencies and securities-based coins from abuse the SEC requires that all celebrities who promote such investments make the following clarification on their social and promotional channels:
- The nature of their relationship with the cryptocurrency
- The scope of their roles within the promoted investment
- The full value of the compensation received for their endorsement
Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, said:
“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.”
Given Seagal started promoting the ICO half a year after the SEC confirmed that cryptocurrencies fall into the Securities category, he received no leniency in terms of the case against him.
Hit Where It Hurts Most
Segal may be numb to physical contact given his lifelong love affair with martial arts, however, the SEC hit the ageing movie star where it hurts most – his wallet.
The would-be crypto king was ordered to pay more than $314,000 in disgorgements, prejudgement interest and penalties. He also received a 3-year ban from promoting any form of securities.
His single biggest victory, in this case, was the fact that the SEC allowed him to pay the penalties and go about his day without having to admit (legally) to any wrongdoing.