2017 and 2018 were wild days for initial coin offerings, when an assortment of B-list actors, athletes, and music artists would tie their name to a project.
Today, the US Securities and Exchange Commission (SEC) continued to press its case against the participants in a crypto project linked to actor and martial arts aficionado Steven Seagal.
According to an SEC complaint filed in US District Court for the Eastern District of New York, three individuals behind Start Options and Bitcoiin2Gen fraudulently convinced small investors to part ways with more than $11 million in cash for tokens and products that did far less than they claimed.
Kristijan Krstic and John DeMarr were the founder and chief marketer, respectively of Start Options, which purported to be a platform for trading and mining cryptocurrencies, as well as Bitcoiin2Gen, a token the SEC says is a “sham.”
“DeMarr fraudulently misappropriated at least $1.8 million—nearly half of the fiat currency he raised from investors—for his own personal benefit, including car payments and personal credit card debts,” reads the SEC complaint. “Krstic, meanwhile, received more than $9 million of investor funds in fiat currency and digital assets.” Krstic allegedly pulled out of the scheme in 2018 without refunding investors.
This despite DeMarr calling Start Options “the largest exchange in euro volume and liquidity.”
The third person named in the complaint is Robin Enos, who the SEC says received about $12,000 from DeMarr for assisting in the marketing effort. The two allegedly erroneously claimed B2G tokens would be mineable and tradable by April 2018—the same month Krstic abandoned the project.
Seagal was previously fined by the SEC last February for marketing Bitcoiin2Gen without revealing he had been paid $157,000 in B2G token to do so.
Seagal promoted Bitcoiin2Gen in February 2018 as a way “to empower the community by providing a decentralized P2P payment system with its own wallet, mining ecosystem and robust blockchain platform without the need of any third party.”
The earth has music for those who listen. pic.twitter.com/aPqGB9neU0
— Steven Seagal (@sseagalofficial) March 12, 2018
Of course, that was before the token became worthless.
Today’s complaint seeks financial penalties, disgorgement plus interest for aggrieved investors, and injunctive relief against the parties. DeMarr also faces criminal charges filed by the Department of Justice and the US Attorney's Office for the Eastern District of New York.