The U.S. Securities and Exchange Commission (SEC) said in a statement on Thursday that Seagal did not disclose payments received in return for promoting the token launched by Bitcoiin2Gen (B2G) in February of that year.
Martial artist and actor Steven Seagal has been charged for his role in promoting a 2018 initial coin offering (ICO).
The SEC said Seagal had not disclosed he was offered $250,000 in cash and $750,000 worth of B2G tokens in exchange for his services in promoting the ICO. These had included social media posts calling on his followers and fans not to «miss out» on the token investment, according to the SEC order. He also issued a press release titled, «Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen.»
Seagal was further quoted in a B2G press release saying he backed the ICO «wholeheartedly.»
«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.»
Even at its launch, B2G had been compelled to issue a statement refuting accusations it was a pyramid scheme over its marketing practices. A month later, the Tennessee Department of Commerce and Insurance warned the state’s residents about the token project.
The SEC has previously advised celebrity endorsements of a token may be illegal if it is deemed a security. Promoters «must disclose the nature, scope, and amount of compensation received in exchange for the promotion,» the regulator says in today’s announcement.
The SEC orders states Seagal broke the anti-touting provisions of federal securities laws and has agreed to pay $157,000 in disgorgement without admitting or denying any wrongdoing.
The disgorgement covers the actor’s promotional payments, with prejudgment interest and a penalty of $157,000, according to the SEC. He’s also agreed not to promote any security for three years.
The SEC said the investigation is continuing.
‘No Argument’ for Replacing Dollar’s Global Role With Crypto: Ex-Fed Official
A former official from the U.S. Federal Reserve has responded to a proposal from the chief of the Bank of England that a cryptocurrency could be more beneficial in intentional markets than the U.S. dollar.
Bloomberg wrote on Wednesday that the governor of the British central bank had argued last month that a Libra-like “Synthetic Hegemonic Currency”, best provided by the public sector, would help end the dominance of the dollar as the global reserve currency. It would, he proposed, also be a better option than another fiat currency, such as the yuan, ultimately replacing USD.
“In the longer term, we need to change the game. … When change comes, it shouldn’t be to swap one currency hegemon for another”, Carney said in a speech at the Jackson Hole Symposium 2019. He will step down from his BoE role in January 2020.
The Libra project, led by Facebook and backed by a group of 28 major firms including Uber, PayPal and Visa, aims to launch a stablecoin representing a basket of fiat currencies and government bonds.
Responding to Carney, Simon Potter, who was until recently executive vice president and head of the Markets Group at the New York Fed, said that the case had “no argument” to support it and doesn’t take into account the benefits of the dollar’s international role.
At an event in New York yesterday, Potter stated:
“I see no argument that makes sense to have something that complicated out there when you have large, liquid capital markets in the U.S.. Not having one currency that you can basically price things and have a deep market in, that makes life much harder for the global economy.”
While it’s probably unlikely that the central banks of would work together on a shared digital currency, Potter said there’s the risk that private firms will – and that should be a “concern” to central banks.
While national monetary sovereignty is “designed to protect people and get good outcomes, companies are “much more interested in selling products”, he argued.