SEC charged three partners of the cryptocurrency startup Bitcoiin2Gen with fraud totaling $11.4 million in connection with an ICO involving Hollywood actor Steven Seagal.
According to the SEC, from December 2017 to May 2018, Bitcoiin2Gen founder Kristian Krstic, Start Options promoter John De Marr, and partner Robin Enos offered investors ‘digital assets B2G with the properties of securities.’ The complaint was filed in the U.S. District Court for the Eastern District.
“The actions of the defendants were a crude attempt to mislead those interested in digital technologies. The partners must be held to account. The startups were fraudulent and aimed to misappropriate investors’ funds,” said Christina Littman, head of the SEC’s Cybercrime Division.
Bitcoiin2Gen billed itself as a ‘second-generation cryptocurrency,’ but bore many similarities to a pyramid scheme. In particular, the project featured a multi-level referral system with substantial affiliate rewards.
In February 2018, actor Steven Seagal became a brand ambassador for Bitcoiin2Gen and actively promoted the ICO campaign on social media.
The startup raised $75 million. In early March 2018, the New Jersey Bureau of Securities halted the Bitcoiin2Gen project’s ICO to protect investors from potential fraud.
Earlier in February 2020, the SEC fined Seagal for concealing the compensation he received for promoting the startup’s token sale and banned the actor from promoting securities for three years.
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