Steven Seagal-Endorsed Bitcoin Knockoff Gets Strong Regulatory Warnings
Regulators in New Jersey and Tennessee are sending clear signals that investors should steer clear of a cryptocurrency endorsed by faded action-film star Steven Seagal.
In a perfect world, the warnings would be superfluous. Seagal is the brand ambassador for Bitcoiin 2nd Generation, or Bitcoiin2Gen. Yes, that’s “Bitcoiin” with two “i”s, an apparent attempt to create investor confusion between the Seagal-fronted project and the pioneering cryptocurrency Bitcoin, with which the new entrant has no affiliation. Moreover, according to CoinDesk, “Bitcoiin” has some features of a pyramid scheme.
But in case those red flags aren’t red enough, New Jersey’s Bureau for Securities issued a cease-and-desist order earlier this month that described “Bitcoiin” as an unregistered security and highlighted the unclear nature of Seagal’s relationship with the project.
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Then on Thursday, Tennessee’s Department of Commerce & Insurance issued an alert that “Bitcoiin” has not registered as a security issuer with the state, and that investors should “be cautious when investing in cryptocurrencies.” The watchdogs identify several signs of questionable investments, including guarantees of high returns and low risk, social media advertising, and “pressure to buy immediately.”
Seagal has tweeted several times about “Bitcoiin,” often with the hashtag #ad, as the project seeks to attract investors to its Initial Coin Offering, or ICO. ICOs attracted huge interest in 2017 as the cryptocurrency market boomed, but a recent survey found that half of those projects have already collapsed. Many have turned out to be blatant frauds. Seagal is one of several celebrities to endorse cryptocurrencies in recent months, but such behavior could be subject to prosecution in some circumstances.
Seagal’s interest in cryptocurrency has a tangential but fascinating geopolitical angle. Seagal is a well-known supporter of Russian autocrat Vladimir Putin, and was granted Russian citizenship in 2014. A recent report from TIME found that Putin’s government had provided support for the development of the Venezuelan Petro, another cryptocurrency project that investors should probably steer clear of.