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Cease-and-Desist Issued to Bitcoiin, ICO Endorsed by Steven Seagal

Cease-and-Desist Issued to Bitcoiin, ICO Endorsed by Steven Seagal

The US state of New Jersey issued a cease-and-desist order to an initial coin offering (ICO) of Bitcoiin, a cryptocurrency project endorsed by actor Steven Seagal.

New Jersey’s Bureau of Securities filed the order on March 7 on the grounds that Bitcoiin is selling unregistered securities to residents of New Jersey. According to the document, “Bitcoiin has never been registered to sell securities in the state of New Jersey.”

Steven Seagal endorsed the cryptocurrency project on his official Twitter account on February 20 but has since removed the tweet. The US Securities and Exchange Commission (SEC) warned the public about celebrity endorsements for cryptocurrency in November 2017.

Apart from the public endorsement from Steven Seagal, no other participants in the Bitcoiin project have been publicly identified. The cease-and-desist order emphasized this, stating that "Bitcoiin's developers, officers, managers, employees, controllers, and/or directors are anonymous."

Seagal, an film actor who became popular for his role in actions films released in the 1990s, allegedly did not hold any ownership stake in Bitcoiin. However, one point of contention emphasized in the cease-and-desist order was the lack of information on the compensation, if any, Seagal received in connection to his endorsement of Bitcoiin.

The cease-and-desist order stated that Bitcoiin’s websites “do not disclose what expertise, if any, Steven Seagal has to ensure that the Bitcoiin investments are appropriate and in compliance with federal and state securities laws” and that “no disclosures as to the nature, scope, and amount of compensation paid by Bitcoiin in exchange for Steven Seagal's promotion of the Bitcoiin investments" were available.

New Jersey State Attorney General Gurbir Grewal said that “celebrity endorsements can add to the excitement and hype of cryptocurrency-related investments, but they do not guarantee that an investment is sound or even legal."

12 Mar 2018

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