New Jersey Issues Cease-and-Desist to ICO Endorsed by Steven Seagal
The U.S. state of New Jersey has issued a cease-and-desist order to an initial coin offering (ICO) endorsed by film actor Steven Seagal.
In an order entered on March 7, the New Jersey Bureau of Securities alleged that Bitcoiin is selling unregistered securities to New Jersey residents. The document highlights the lack of concrete information about those behind the project, stating that "Bitcoiin's developers, officers, managers, employees, controllers, and/or directors are anonymous," though it highlights the endorsement by Seagal.
"Bitcoiin has never been registered to sell securities in the State of New Jersey," officials wrote.
The project made headlines last month after Seagal, best known for his action film roles in the 1990s, publicly endorsed the cryptocurrency offering through his official Twitter account - a notable development given the string of endorsements seen last year and the subsequent warning by the U.S. Securities and Exchange Commission (SEC) regarding celebrity involvement in token sales.
The Bitcoiin ICO had sparked accusations that it was a pyramid scheme seeking to mislead investors through the close name association with bitcoin - allegations that Bitcoiin later rebuked in a public statement.
Notably, New Jersey's cease-and-desist order highlight's Seagal's role as a brand ambassador, noting a disclaimer on its website that states the actor holds no ownership stake in the project. That said, officials drew issue with the lack of information regarding the compensation he may have received.
"The Bitcoiin Websites do not disclose what expertise, if any, Steven Seagal has to ensure that the Bitcoiin investments are appropriate and in compliance with federal and state securities laws," the order explains. "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."
A day before New Jersey's cease-and-desist order was published, Seagal posted a tweet claiming that Bitcoiin was on the cusp of being "listed on some of the biggest exchanges globally," with his message bearing an "#Ad" hashtag. He added that additional details are "coming very shortly."
Officials framed Wednesday's cease-and-desist action as an effort to protect investors in the state from potential fraud.
"The Bureau's actions today are a reminder to investors that while celebrity endorsements can add to the excitement and hype of cryptocurrency-related investments, they do not guarantee that an investment is sound or even legal," Attorney General Gurbir Grewal said in a statement.
Image Credit: Gage Skidmore/Flickr