- The US Securities and Exchange Commission wants Steven Seagal to pay a $200,000 fine
- The actor moved to Russia to avoid US sanctions and paying the fees
- Seagal is asked to pay the fine for his alleged role in promoting a crypto token.
Steven Seagal’s War with SEC
Veteran actor Steven Seagal has been asked by the US Securities and Exchange Commission to pay up the $200,000 fine for his failure to disclose he was being paid to promote the Bitcoiin2Gen crypto Token. Seagal, who found success in acting after his debut in Above the Law in 1988, promoted Bitcoiin2Gen(B2G) Initial coin offering (ICO) on social media urging fans not to miss out on the piece of the token.
The SEC which charged Seagal with “Unlawfully Touting Digital Asset Offering” alleged that the actor was promised $250,000 cash and $750,000 in tokens if he promoted the token and did not disclose this to his supporters.
The SEC on Feb. 27, 2020 – In a press release disclosed that Seagal broke the anti-touting regulations of the US federal securities laws. Although the “Beyond the Law” actor never admitted or denied the findings, he agreed to pay $314,000 Settlement in fine. $157,000 in disgorgement and $157,000 in penalty. He was also given a 3-years-ban in promoting any form of digital coins/Tokens, or securities of any kind.
The Backlash of Celebrity Endorsements
During the year of the ICO in 2017, the SEC’s Office of Education and advocacy (OIEA) warned investors not to base their financial decisions solely on an endorsement by a celebrity. This is because, as they reported, celebrities in all channels (both social and traditional media) can be manipulated or even deceived into promoting an investment opportunity or product, that is fake, or a scam. They stated that it’s never a good idea to listen to famous people promote investment and jump on it without doing personal research.
According to Kristina Littman, SEC’s Chief of Enforcement Division’s Cyber Unit, since celebrities are not allowed to tout securities without opening up on their compensation, Seagal was supposed to disclose to investors and his fans the payment he received as well as what he was promised to help them decide whether they were biased into buying the token.
Celebrity endorsements are very common in the crypto industry. Although these endorsements come out subtle in a way that may not be necessarily illegal. In the past few months, before the big BTC crash of May, there were a lot of indirect celebrity endorsements for coins, the most popular being Elon Musk’s tweets about Dogecoin.
Seagal’s Moscow Move – A Run Against Sanctions.
On August 27, a ruling by a federal High court judge in Brooklyn permitted the SEC to reclaim Seagal’s unpaid debts. It was reported that the actor had agreed to pay the fines which totaled more than $330,000 for settlement before moving to Moscow. He was alleged to have paid only $75000 and had defaulted on the remainder.
In 2016, Russian President Vladimir Putin, in a presidential decree granted the veteran Hollywood actor Russian citizenship. Seagal is now living in Moscow.
In many repeated demands, neither Seagal nor his representative has heeded SEC’s directives to appear in court and respond to the demands. According to reports, US district judge William Kuntz granted the SEC permission to go through Seagal’s business manager to collect the remaining fine he was asked to pay. The actor may not be paying the fine anytime soon since he has refused to respond to the SEC.
Although there are rumors that the actor is trying to invest in other countries, it may likely be a wrong move since he is still owing the US government.
We will not see the end of celebrity endorsements anytime soon. Outside the Airdrop strategy, and community engagements, most ICOs rely on these endorsements schemes to get people on board. Some ICOs also lie about their partnership with big brands. It’s an old trick in the bag. It’s not going away soon. The industry will continue to co-exist with these categories of people: The good, the bad, and the Horrible.