US charges Serbian man behind Steven Seagal-promoted Bitcoiin2Gen scam

US charges Serbian man behind Steven Seagal-promoted Bitcoiin2Gen scam

Authorities in the United States have unveiled charges against a Serbian man who allegedly operated a $7 million cryptocurrency scam. Krstijan Krstic founded Start Options and Bitcoiin2Gen, or B2G, in 2017 and reportedly induced U.S. investors into the scam. Krstic also tapped Steven Seagal to promote his scam, which resulted in the actor settling charges with regulators.

The U.S. Justice Department unsealed an indictment against Krstic in a federal court in Brooklyn. It charged him with conspiracy to commit wire fraud, securities fraud, conspiracy to commit money laundering and conspiracy to commit securities fraud. If convicted, he faces up to 20 years’ imprisonment.

Krstic allegedly founded Start Options and B2G in 2017 at the height of the ICO bubble. Together with his other co-conspirators, he fraudulently induced U.S. based investors to purchase securities in the companies, federal authorities said. He used the alias ‘Felix Logan’ to perpetuate the fraud, the DoJ claimed in its press release.

Start Options purported to be an online investment platform offering block reward mining and trading. It falsely claimed to be the largest BTC exchange in euro volume and liquidity. B2G, on the other hand, purported to be an ecosystem powered by B2G tokens for trading digital assets. “Dollars buy B2G; B2G tokens can be exchanged back into dollars, or for Euros, or for other national fiat currencies. B2G holdings can be traded for original bitcoin or other altcoins,” its website stated.

According to the DoJ, Krstic funneled all the money he raised to a bank account and digital wallet in the Philippines. He raised roughly $7 million before he disappeared and stopped communicating with the investors. He would later publish a press release that falsely claimed he had sold Start Options to Russian investors.

As CoinGeek reported, Krstic had hired Steven Seagal to promote his fraudulent firms. He had allegedly paid the actor $250,000 in cash and $750,000 worth of B2G tokens. The U.S. Securities and Exchange Commission (SEC) cracked down on Seagal in 2020, and he ended up paying $157,000 in disgorgement. He also had to pay a similar amount as a penalty.

Ryan Korner, a special agent with the Internal Revenue Service, shot a warning to scammers who think they are beyond the authorities’ reach just because they are using a digital token. The IRS was one of the authorities that had investigated Krstic, partnering with the FBI and the DoJ.

Agent Korner remarked, “Under the cloak of an international online digital currency exchange, $7 million in investor funds from B2G and Start Options were allegedly funneled from unwitting investors directly to Krstic’s pocket. Whether online or on the streets, financial crime never pays, and IRS Criminal Investigation will continue to work tirelessly to ensure those who are involved are brought to justice.”

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups-from BitMEX to BinanceBitcoin.comBlockstreamShapeShiftCoinbaseRipple and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.

New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.

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