Seagal, 67, did not tell his millions of social media followers that Bitcoiin2Gen had promised him $250,000 in cash and $750,000 worth of its tokens before promoting its initial coin offering on Twitter and Facebook, according to the SEC. Under the settlement, Seagal agreed to pay the SEC more than $330,000 in penalties and interest, including $157,000 that Bitcoiin2Gen had already paid him.
“These investors were entitled to know about payments Seagal received or was promised to endorse this investment so they could decide whether he may be biased,” Kristina Littman, chief of the SEC enforcement division’s cyber unit, said in a statement.
In February 2018, Seagal posted a news release on Facebook, where he has 6.7 million followers, announcing he had become the company’s “brand ambassador,” according to the SEC settlement. He also congratulated the company on Twitter, where he has more than 100,000 followers, for reaching its financial goals. “Friends, I wanted to announce that @Bitcoiin2Gen will soon be listed on some of the biggest exchanges globally,” he said in a March 2018 Twitter post. “Stay tuned for more information coming very shortly.”
Seagal failed to disclose in those posts that he was being paid by Bitcoiin2Gen, according to the SEC.
“Celebrities are not allowed to use their social media influence to tout securities without appropriately disclosing their compensation,” Littman said.
According to a statement provided by his attorney, Ivan B. Knauer, Seagal agreed to allow his image to be used to promote the company’s initial coin offering, known as an ICO, and other people posted items on his social media accounts. “To him, it was simply a case of someone paying a celebrity for the use of his image to promote a product,” the statement said. Eventually, Seagal became concerned with the “bona fides of the product and terminated the relationship.“
The statement does not explain Seagal’s concerns or when he terminated the relationship. It also does not address why the payments from Bitcoiin2Gen were not disclosed to would-be investors.
Seagal cooperated with the investigation and has moved on, according to the statement. “He looks forward to continuing his life’s work as an actor, musician, martial artist and diplomat,” the statement said.
Seagal is not the first celebrity the SEC has fined for failure to disclose relationships with cryptocurrencies. The SEC has grown concerned that the cryptocurrency market is teeming with scams and has repeatedly targeted initial coin offerings, in which a company creates a new cryptocurrency and sells it to investors to raise money.
In 2018, the agency settled charges against boxer Floyd Mayweather Jr. and musician DJ Khaled.
Khaled received a $50,000 payment from Centra Tech and touted its initial coin offering as a “game changer” to his online followers, according to the SEC. He reached a settlement of more than $150,000 with the SEC. Mayweather promoted three ICOs and said on Twitter, “You can call me Floyd Crypto Mayweather from now on.” He agreed to a settlement of over $600,000.
Seagal is best known for his role in 1990s action movies such as “Hard to Kill” and “Under Siege” but in recent years has been involved in several controversies. In 2017, Seagal, who has attempted to cultivate a friendship with Russian President Vladimir Putin, was blacklisted from Ukraine as a national security threat.
The next year, several women accused Seagal of sexual misconduct. Seagal has denied the allegations.