Today, the US Securities and Exchange Commission, or SEC, has made an announcement regarding the case against actor Steven Seagal.

Deceptive Advertisement

According to the report, during the times roughly correlating with the 12th of February 2018, through to the 6th of March, 2018, Seagal advertised a security on social media. This security was being offered and sold through an Initial Coin Offering. The act itself is okay, but Seagal was being paid for these promotions, something that he had failed to disclose during his advertisements. Seagal failing to disclose the fact that he was being compensated, violates Section 17(b) of the Securities Act. This law makes the promotion without full disclosure of compensation illegal.

Seagal, now aged 67, is currently living within Moscow, Russia. The US national held approximately 6.7 million Facebook followers, as well as 107,000 Twitter followers during the Relevant Period of this case.

Breaking The Law Through Endorsement

Through his Facebook and Twitter accounts, he promoted a security that was being sold via an ICO. He allowed the ICO’s issuer to use his likeness on its official website, as well as various marketing materials. To add a nail in the coffin, Seagal even took part in a webinar with potential investors for that ICO, once more for monetary compensation by the issuer of the ICO itself.

Seagal promoted the securities that were offered through an ICO run by a firm called “Bitcoiin2Gen”, or B2G. The sheer dubiousness of a name intentionally spelled like that aside, the international online company issued, offered, and sold its digital tokens, aptly named B2G Tokens. They did this during the periods of the 12th of February, 2018, and the 26th of March, 2018. The tokens that B2G had offered and sold operated as investment contracts. Therefore, they were considered Securities under US Law, Section 2(a)(1) of the Securities Act.

Pretty Pennies

The agreement between Seagal and the company controlling B2G stipulated that Seagal would be paid $250,000 in cash, with an additional $750,000 equivalent in B2G tokens. According to the Agreement, B2G announced through a press release on the 12th of February, 2018, that Seagal would begin endorsing its ICO.

This endorsement comes just after four months of when the SEC itself laid out a public statement. Within this statement, it reminded market participants that any individual, celebrity or otherwise, that promotes a virtual coin or token that is considered a security, must also disclose the compensation they are getting for it.