The Securities and Exchange Commission (SEC) has nailed the operators of Bitcoiin2Gen, a fraudulent crypto project. This week, the agency finally unveiled charges against three defendants, marking another development in the long-standing case.
A Full Clampdown
Yesterday, the financial watchdog announced that it had charged three individuals concerning the Bitcoiin2Gen Initial Coin Offering (ICO). The individuals are; John DeMarr, the project’s founder, promoter Robin Enos, and business associate Kristijan Krstic. The men were for defrauding investors through the scheme, which ran between December 2017 and May 2018.
According to the financial regulator, DeMaarr and Krstic first promoted Start Options, a purported crypto mining and trading platform that was operated by Kristic between December 2017 and January 2018. Thereafter, the men promoted the Bitcoiin2Gen ICO, sharing false information and fake marketing materials to their investors and duping them off $11 million.
Among their many claims, the men allegedly told investors that the Bitcoiin2Gen’s B2G token would be compatible with the Ethereum blockchain, and that the company will invest all funds from the ICO into developing a mineable asset. They also claimed that the asset would be tradable on top exchanges.
DeMarr and Krstic will now face charges for violating federal securities laws’ anti-fraud and registration provisions. Enos will also face charges for aiding and abetting the operation of the fraudsters.
Along with possible jail term, the SEC is also seeking penalties, disgorgement plus interest, and a ban on DeMarr and Krstic, preventing them from directing any companies in the future. Kristina Littman, chief of the SEC Enforcement Division’s Cyber Unit, said:
“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.”
Scamming Their Marketer
Along with their promotion, the accused also hired prominent actor Steven Seagal to be their celebrity marketer and the brand’s face. The SEC charged Seagal last year for failing to disclose payments received for promoting the company. However, as the agency found out, Bitcoiin2Gen had also duped the actor.
Seagal made his first appearance as brand ambassador in March 2018, promoting the project on his social media channels and appearing in its marketing materials. However, while they promised to pay $750,000 in B2G tokens and $250,000 in cash, he only got $1577,000 in total payments for his work.
The actor eventually agreed to a settlement with the SEC, paying $330,000 in fines. The sum amounted to double his payment, as well as an extra $16,000 in prejudgment interest.
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 the company’s 2018 ICO. However, Seagal claims to have only received $157,000 for plugging the offering.
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