SEC Crackdown: Former Action Star & “Zen Master” Steven Seagal Ordered to Pay $314,000

TL;DR: The Securities and Exchange Commission (SEC) announced it “settled charges against actor Steven Seagal for failing to disclose payments he received for promoting an investment in an initial coin offering (ICO) conducted by Bitcoiin2Gen (B2G).”       

Former Action Star & “Zen Master” Steven Seagal Ordered to Pay $314,000

The SEC published its settlement with former action movie star Steven Seagal related to what it termed unlawful touting. It apparently is a provision of federal securities law, warning against “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,” the agency explained.

Seagal lent his image and wholehearted endorsement of an ICO, Bitcoiin2Gen, which continues to market itself as the “World’s first self-sufficient crypto currency eco-system!”  Seagal, according to the SEC, “failed to disclose he was promised $250,000 in cash and $750,000 worth of B2G tokens in exchange for his promotions,” where he was referred to as a “Zen Master.” He allegedly was trying to cash-in on the 2017 crypto boom as many celebrity endorsements were coveted by ICOs, no matter how obscure.

The SEC was able to nab Seagal on the disclosure failure, as touting, by itself, isn’t necessarily against regulations, but doing so without explicitly stating terms for such marketing is what’s frowned upon. Critically, Seagal did not admit nor deny the agency’s findings, but now must “pay $157,000 in disgorgement, which represents his actual promotional payments, plus prejudgment interest, and a $157,000 penalty. In addition, Seagal agreed not to promote any securities, digital or otherwise, for three years.”

In late 2018, boxer Floyd Mayweather and music artist DJ Khaled were charged similarly in the first such cases brought by the SEC. The two were ultimately cleared of wrongdoing in a broader investor lawsuit concerning millions in losses at the hands of a notorious ICO.

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