The SEC has charged three individuals for defrauding investors out of millions through the Steven Seagal-backed Bitcoiin2Gen ICO.
The U.S. Securities and Exchange Commission has charged three individuals for various cryptocurrency frauds including the 2018 initial coin offering for the Steven Seagal-promoted altcoin, Bitcoiin2Gen.
A Feb. 1 SEC announcement estimates that Bitcoiin Gen founder John DeMarr, Start Options founder Kristijan Krstic, and promotor Robin Enos duped investors out of more than $11 million through two fraudulent and unregistered securities offerings from December 2017 until May 2018.
The SEC alleges that Krstic and DeMarr first spruiked Start Options’ purported crypto asset mining and trading platform in December 2017 and January 2017, falsely claiming it was “the largest Bitcoin exchange in euro volume and liquidity” at the time.
From January until May of 2018, the trio then promoted Bitcoiin2Gen’s ICO, with the SEC accusing the individuals of knowingly disseminating fraudulent promotional materials to the investing public.
The complaint asserts Bitcoiin2Gen’s empty promises included purporting Ethereum compatibility for its B2G token, claiming the raised funds would be reinvested into developing a mineable crypto asset, and asserting the B2G token would be tradable on a proprietary exchange. However, according to the SEC:
“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 of violating the antifraud and registration provisions of federal securities laws, while Enos will face charges of aiding and abetting said antifraud violations. The SEC is seeking disgorgement plus interest, penalties, and a bar against Krstic and DeMarr from operating or directing companies in future.
“The conduct alleged in this action was a blatant attempt to victimize those interested in digital asset technology and these defendants should be held accountable," said Kristina Littman, chief of the SEC Enforcement Division's Cyber Unit
On the same day, the U.S. Attorney's Office and the Department of Justice announced parallel criminal charges against DeMarr.
In addition to their investors, Bitcoiin2Gen also appears to have scammed actor Steven Seagal — who was promised $750,000 in B2G tokens and $250,000 in cash for promoting Bitcoiin2Gen’s ICO in 2018. However, Seagal claims to have only received $157,000 for plugging the offering.
Seagal was charged by the SEC in February 2020 for failing to disclose the remuneration he received in exchange for promoting the ICO on his social channels and was ordered to pay $330,000 to the commission.