SEC settles charges with actor Steven Seagal for promoting crypto ICO without disclosure

The US SEC mandates celebrities are not allowed to use their social media influence to tout securities without appropriately disclosing their compensation.
Written by Asha Barbaschow, Contributor

The United States Securities and Exchange Commission (SEC) has settled charges against actor Steven Seagal for failing to disclose payments he received for promoting an investment in an initial coin offering (ICO).

The ICO was conducted by Bitcoiin2Gen (B2G).

The SEC's order finds that the Above the Law actor 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 the ICO.

See also: What should you do when your ICO is dead in the water? Flog it on eBay

The SEC said a press release titled "Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen" also included a quote from Seagal stating that he endorsed the ICO "wholeheartedly".

The promotions, the SEC said, came six months after the SEC's 2017 DAO Report warning that coins sold in ICOs may be securities.

The SEC has previously advised that, in accordance with the anti-touting provisions of the federal securities laws, 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," chief of the SEC Enforcement Division's Cyber Unit Kristina Littman said.

"Celebrities are not allowed to use their social media influence to tout securities without appropriately disclosing their compensation."

The SEC's order finds that Seagal violated the anti-touting provisions of the federal securities laws.

The regulator said 67-year-old Seagal agreed to pay $157,000 in disgorgement, which represents his actual promotional payments, plus prejudgment interest, and a $157,000 penalty.

Without admitting or denying the SEC's findings, Seagal also agreed not to promote any securities, digital or otherwise, for three years.

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