Steven Seagal-backed ICO Bitcoiin2Gen Slapped with Cease and Desist Order
The New Jersey Bureau of Securities has slapped the Steven Seagal-backed preliminary coin offering (ICO) «Bitcoiin2Gen» (Bitcoiin or B2G) with a cease and desist order, alleging it's fraudulently selling unregistered securities.
The arrangement, which was entered on March 7, isn't entirely surprising, as the project was characterized by a number of red flags — and regulators have not been shy about the fact that no ICO is Above the Law.
Most importantly, New Jersey's securities officials took issue with action film hero and «Zen Master» Steven Seagal's endorsement of this token sale.
«The Bitcoiin Websites do not disclose exactly what expertise, if any, Steven Seagal has to ensure that the Bitcoiin investments are appropriate and in compliance with state and federal securities laws,» the order reads. «Additionally, there are 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.»
The SEC, incidentally, has called such endorsements «potentially unlawful» and has warned that celebrities who endorse securities offerings without making proper disclosures could face prosecution.
Moreover, as CCN reported — and New Jersey noted in its cease and desist order — an infographic explaining the ICO's referral program is literally shaped like a pyramid, even though the company has assured concerned parties that it is not a pyramid scheme.
Lastly, the ICO also estimated that its B2G tokens — that are priced at $5 each during the token sale — will be worth $388 by December, netting investors a trendy 7,700 percent profit.
In addition to being prohibited from offering its tokens to New Jersey residents, the order warned that Bitcoiin may face other enforcement actions, including both ancillary relief and civil penalties.
Bitcoiin2Gen — that currently finds itself Under Siege, as it were -- hasn't addressed the cease-and-desist order publicly, rather saving its Twitter feed for more important matters — like retweeting Maxim articles discussing the merits of one-night stands.