The SEC has charged three people with defrauding investors out of millions via the Steven Seagal-backed Bitcoiin2Gen ICO.
The U.S. Securities and Exchange Commission has charged three people with multiple cryptocurrency frauds, including an early 2018 coin offering for the Steven Seagal-promoted altcoin, Bitcoiin2Gen.
A Feb. 1 SEC statement reports that Bitcoiin Gen founder John DeMarr, Launch Options founder Kristijan Krstic, and Robin Enos promoter have dubbed holders in excess of $11 million across two illegal and unregistered stock offers from December 2017 to May 2018.
The SEC alleges that Krstic and DeMarr first spurred Start Options’ alleged crypto asset mining and trading site in December 2017 and January 2017, wrongly reporting that it was “the largest bitcoin exchange in euro volume and liquidity” at the period.
From January to May 2018, the trio then marketed Bitcoiin2Gen’s ICO, while the SEC suspected individuals of intentionally supplying misleading advertising materials to the investment public.
The lawsuit argues that Bitcoiin2Gen’s empty assurances included purporting Ethereum compatibility with its B2G token, stating that the collected funds will be reinvested in the creation of a mineable crypto asset, and asserting that the B2G token will be tradable on a proprietary platform. According to the SEC, however:
“Bitcoiin2Gen was a sham, and Krstic and DeMarr allegedly misappropriated millions of dollars of investor funds for their own personal benefit.”
Krstic and DeMarr will face charges for breaching the anti-fraud and registry clauses of the federal securities regulations, while Enos will face charges for aiding and betting the anti-fraud offenses. In the future, the SEC wants disgorgement plus interest, fines and a ban against Krstic and DeMarr from running or directing businesses.
“The conduct alleged in this action was a blatant attempt to victimize those interested in digital asset technology and those defendants should be held accountable,” said Kristina Littman, Head of the Cyber Unit of the SEC Compliance Division.
That day, the U.S. Attorney’s Office and the Department of Justice have reported concurrent felony cases against DeMarr.
In addition to their founders, Bitcoiin2Gen also claims to have scammed actor Steven Seagal—who was offered $750,000 in B2G tokens and $250,000 in cash to promote Bitcoiin2Gen’s ICO in 2018. Seagal says, however, that it only got $157,000 for plugging the deal.
Seagal was fined by the SEC in February 2020 for failure to report the remuneration it obtained in exchange for advertising the ICO on its social media and was ordered to pay $330,000 to the Commission.
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