The Securities and Exchange Commission has today charged famous action actor Steven Seagal for unlawfully touting a digital asset offering. The actor was accused of failing to disclose payments he received for promoting an investment in an initial coin offering (ICO) conducted by Bitcoiin2Gen (B2G).
Seagal has thus been charged with violating the anti-touting provisions of the federal securities laws. However, the actor neither denied or admitted to the SEC’s findings, choosing rather to agree to pay $157,000 in disgorgement. This figure represents his actual promotional payments, plus prejudgment interest, as well as a $157,000 penalty.
In addition, Seagal agreed not to promote any securities, digital or otherwise, for three years.
The SEC proclaimed 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 SEC has, since 2017, been warning that ICOs may well represent securities after they released the DAO Report. Moreover, the Commission also said, in accordance with anti-touting provisions 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.
“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 Bitcoiin2Gen and Seagal relationship was short lived in any case as less than two months after making headlines with the association to the ICO it was announced that Seagal was no longer a brand ambassador for the project.