The US Securities and Exchange Commission [SEC] has charged three individuals on the 1st of February with defrauding hundreds of retail investors of $11.4 million via the 2018 B2G token offering advocated by Hollywood actor Steven Seagal.
The accused were involved with the now-defunct crypto projects called Bitcoiin2Gen which was the 2018 initial coin offering for the Steven Seagal-promoted altcoin and Start Options.
Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit was quoted saying,
“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. In reality, we allege, these ventures were fraudulent enterprises aimed simply at misappropriating funds from investors.”
According to SEC’s complaint, Kristijan Krstic, the founder of Start Options and Bitcoiin2Gen, and John DeMarr, the primary U.S.-based promoter for these firms, fraudulently persuaded the investors to purchase digital asset securities from approximately December 2017 through May 2018.
The US watchdogs further alleged that Krstic and DeMarr also claimed Start Options’ purported digital asset mining and trading platform from December 2017 through late January 2018.
The SEC further noted that the two individuals in question allegedly went on to assert that that Start Options was “the largest Bitcoin exchange in euro volume and liquidity” among other claims and also promoted Bitcoiin2Gen’s unregistered initial coin offering [ICO] of digital asset securities known as B2G tokens.
The third individual in the SEC’s complaint was Robin Enos who worked with DeMarr and was accused of drafting sham promotional materials that Enos had known would be circulated to the investors. It further noted that the fraudulent materials included several fake statements including that the B2G tokens would be deliverable on the Ethereum blockchain, that the invested funds would be utilized to develop a cryptocurrency that was “mineable,” and that the tokens would be tradeable on a proprietary digital asset trading platform at the platform’s supposed ‘launch’ in early April 2018.
“In reality, the complaint alleges, these claims about the B2G tokens were false, Bitcoiin2Gen was a sham, and Krstic and DeMarr allegedly misappropriated millions of dollars of investor funds for their own personal benefit.”