Steven Seagal fined by SEC for unlawfully promoting ICO

The SEC has clamped down on another celebrity endorsement of cryptocurrencies by issuing a $157,000 fine to action movie star Steven Seagal

Hollywood actor Steven Seagal has been fined $157,000 for failing to disclose payments received for an Initial Coin Offering (ICO) conducted by Bitcoiin2Gen (B2G).

According to the Securities and Exchange Commission (SEC), Seagal failed to disclose that he was offered $250,000 in cash and $750,000 in B2G tokens in exchange for promoting the project on social media.

The 67-year-old warned that the public shouldn’t “miss out” on the ICO while a press-release from the company stated that Seagal was a brand ambassador and he “wholeheartedly” endorsed the project.

In 2017, the SEC outlined guidelines for celebrities who endorsed cryptocurrency token offerings, stating they must disclose the nature of the endorsement and how much compensation has been offered.

“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.”

Seagal agreed to paying the $157,000 as well as accepting that he cannot promote any securities for the next three years.

This is not the first time the SEC has clamped down on celebrity endorsements of cryptocurrencies, in November 2018 it fined boxer Floyd Mayweather and music producer DJ Khaled for unlawfully promoting ICOs, with the pair being fined $614,775 and $152,725 respectively.

“Investors should be sceptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements,” explained Enforcement Division Co-Director Steven Peikin.

“Social media influencers are often paid promoters, not investment professionals, and the securities they’re touting, regardless of whether they are issued using traditional certificates or on the blockchain, could be frauds.”

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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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