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Hollywood actor turned part-time crypto promoter Steven Seagal has reached a settlement with regulators, after failing to disclose he was receiving payment to promote an initial coin offering (ICO).
The U.S. Securities and Exchange Commission announced that Seagal accepted $250,000 in cash and $750,000 equivalent in B2G tokens for promoting the Bitcoiin2Gen ICO. The promotion included posts on Seagal’s personal social media accounts, urging the public to avoid “missing out” on the chance to invest in the ICO. He also published a press release entitled “Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen” as part of the promotion.
Notably, the promotional activity began six months after the SEC had published a research paper suggesting many ICOs could in fact constitute securities, which would require prior approval from the regulator.
The SEC has also previously raised the issue of celebrity endorsements for ICOs under anti-touting provisions. Under the guidelines, endorsements must be declared in full, including an accounting of the compensation received for the promotion.
Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit, said celebrities were not allowed to flout these rules and promote securities through their social media platforms: “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.”
Without accepting liability for the charges, Seagal has settled for $157,000 in disgorgement, along with an equivalent penalty of $157,000. He has also agreed not to promote any securities, whether digital or otherwise, for a period of three years.
The SEC warned investors to remain vigilant, and to do their own research in cases where a celebrity has offered an endorsement of an ICO or other security, saying, “The SEC’s Office of Investor Education and Advocacy cautions investors to be wary of celebrity endorsements and to always independently research investment opportunities.”
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