Last month, the state of New Jersey issued a cease and desist order to Bitcoiin2Gen’s initial coin offering (ICO) which is endorsed by the popular action movie actor Steven Seagal.
The order entered on 7th March, revealing that the New Jersey Bureau of Securities alleged that Bitcoiin was issuing unregistered securities to residents of New Jersey. The document also pointed out the lack of specific information about those that are behind the ICO project, stating that “Bitcoiin’s developers, officers, managers, employees, controllers, and/or directors are anonymous,” but it emphasizes Steven Seagal’s endorsement of the Bitcoiin ICO.
“Bitcoiin has never been registered to sell securities in the State of New Jersey,” wrote the officials.
The Bitcoiin ICO project received a lot of media attention last month after Seagal, a well-known actor of 1990’s action films, publicly revealed his endorsement in the cryptocurrency by providing his official Twitter account.
The project has led many to accuse the company of being a multi-level marketing (MLM) or pyramid scheme which is looking to scam investors out of their money through its name which is very similar to Bitcoin, though Bitcoiin2Gen later negated these allegations in a public statement.
The New Jersey’s cease-and-desist order clearly stresses on Seagal’s role as just a brand ambassador, posting a disclaimer on its website that says that Seagal owns no stakes in the project Also, there are no disclosures regarding the nature, scope, and the sum the actor received for the promotion of the ICO.
“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. 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,” read the order.
Before the publishing of New Jersey’s cease-and-desist order, the actor said in a Twiter post that Bitcoiin will soon be “listed on some of the biggest exchanges globally,” with his tweet having an “#Ad” hashtag. He added that further details will be “coming very shortly.”
However, officials said that the purpose of their cease-and-desist order was to protect investors within the state from losing their money through potential fraudulent schemes.
“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,” said Attorney General Gurbir Grewal in a statement.
Earlier this month, the New Jersey regulators have sent a cease-and-desist order to Bitstrade, a cryptocurrency investment website, claiming that Bitstrade was selling unregistered securities in the state.
These measures are the state’s attempt to raise awareness of the existing risks for potential crypto investors and to offer them protection from ICO scams.