Steven Seagal-Endorsed ICO Receives Shut Down Order from NJ State Authority
- This ICO was previously accused of being an MLM scheme by many experts.
Celebrity endorsements are nothing new in the world of product promotion, but when it comes to the ICO market, its unregulated nature makes things very complicated. Recently, the Bureau of Securities of the US state of New Jersey issued a cease-and-desist order to the Initial Coin Offering (ICO) Initial Coin Offering (ICO) An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Accompanying most major ICOs has been the prevalence of a whitepaper. A whitepaper serves as both a persuasive sales pitch, and in-depth report on a specific topic that presents a problem and provides a solution. Most marketers relied on whitepapers to educate their respective audience about a particular issue, or explain and promote a particular methodology that an ICO could potentially solve. The information enclosed in whitepapers have historically been met with skepticism.Why ICOs Have Fallen Out of FavorThis is due in large part to the early days of ICOs, as this practice was highly unregulated and extremely risky. Because there were no regulations delineating who could and could not hold an ICO, many bad actors or incompetent technologists saw the practice as an opportunity to grab a lot of fast cash.As a result, many investors have lost quite a lot of money – their tokens were either never returned to them, or the companies who issued the tokens failed within several months of the token’s official launch.Regulators around the world have cracked down on the practice, which has resulted in a slightly “cleaner” ICO space.However, ICOs have garnered a pretty bad reputation and are still regarded as generally untrustworthy. As such, other methods of fundraising, such as Initial Exchange Offerings (IEOs) and Security Token Offerings (STOs) have been born. An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Accompanying most major ICOs has been the prevalence of a whitepaper. A whitepaper serves as both a persuasive sales pitch, and in-depth report on a specific topic that presents a problem and provides a solution. Most marketers relied on whitepapers to educate their respective audience about a particular issue, or explain and promote a particular methodology that an ICO could potentially solve. The information enclosed in whitepapers have historically been met with skepticism.Why ICOs Have Fallen Out of FavorThis is due in large part to the early days of ICOs, as this practice was highly unregulated and extremely risky. Because there were no regulations delineating who could and could not hold an ICO, many bad actors or incompetent technologists saw the practice as an opportunity to grab a lot of fast cash.As a result, many investors have lost quite a lot of money – their tokens were either never returned to them, or the companies who issued the tokens failed within several months of the token’s official launch.Regulators around the world have cracked down on the practice, which has resulted in a slightly “cleaner” ICO space.However, ICOs have garnered a pretty bad reputation and are still regarded as generally untrustworthy. As such, other methods of fundraising, such as Initial Exchange Offerings (IEOs) and Security Token Offerings (STOs) have been born. Read this Term) of Bitcoiin, which was being promoted by the famous actor Steven Seagal.
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The statement noted: “Bitcoiin has never been registered to sell securities in the State of New Jersey.”
It further explained the lack of information presented by the promoters of the project: “Bitcoiin's developers, officers, managers, employees, controllers, and/or directors are anonymous.”
The involvement of Steven Seagal brought the project into the limelight last month, however, the questionable business model of the project soon attracted criticism, and it was even compared to an MLM or pyramid scheme. The company, however, was quick to release an official statement negating all the allegations against it.
https://twitter.com/sseagalofficial/status/971109899261247488
In the order, the New Jersey Bureau of Securities also questioned the involvement of Steven Seagal in the ICO. As per the US Securities and Exchange Commission’s (SEC) directive, any celebrity involvement in an ICO promotion should disclose the nature, scope, and amount of compensation received in exchange for the endorsement.
The order explained: “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.”
In a statement, Attorney General Gurbir S. Grewal said: “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.”
Bitcoiin’s Response
Although the promoters of the project did not release any official statement after receiving the authority's cease-and-desist order, Asbury Park Press got in touch with a representative of Bitcoiin via email, who mentioned that the firm's lawyers are currently reviewing the order.
However, the representative pointed out that Bitcoiin is a utility token, not a security, and so it does not come under SEC radar. The company wrote: “Therefore we do not have to comply with SEC, and if ever we were supposed to we would do so.”
Celebrity endorsements are nothing new in the world of product promotion, but when it comes to the ICO market, its unregulated nature makes things very complicated. Recently, the Bureau of Securities of the US state of New Jersey issued a cease-and-desist order to the Initial Coin Offering (ICO) Initial Coin Offering (ICO) An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Accompanying most major ICOs has been the prevalence of a whitepaper. A whitepaper serves as both a persuasive sales pitch, and in-depth report on a specific topic that presents a problem and provides a solution. Most marketers relied on whitepapers to educate their respective audience about a particular issue, or explain and promote a particular methodology that an ICO could potentially solve. The information enclosed in whitepapers have historically been met with skepticism.Why ICOs Have Fallen Out of FavorThis is due in large part to the early days of ICOs, as this practice was highly unregulated and extremely risky. Because there were no regulations delineating who could and could not hold an ICO, many bad actors or incompetent technologists saw the practice as an opportunity to grab a lot of fast cash.As a result, many investors have lost quite a lot of money – their tokens were either never returned to them, or the companies who issued the tokens failed within several months of the token’s official launch.Regulators around the world have cracked down on the practice, which has resulted in a slightly “cleaner” ICO space.However, ICOs have garnered a pretty bad reputation and are still regarded as generally untrustworthy. As such, other methods of fundraising, such as Initial Exchange Offerings (IEOs) and Security Token Offerings (STOs) have been born. An Initial Coin Offering (ICO) is a kind of crypto token sale that is used as a method of fundraising, similar to an Initial Public Offering (IPO), in which stocks are sold to raise money for a company.In order to launch an ICO, a company simply needs to create a website, issue a token, and set a time and date for the sale. Investors buy ICO tokens in exchange for another cryptocurrency, like Bitcoin or Ethereum; after a set amount of time, they receive the tokens they purchased in the sale.Accompanying most major ICOs has been the prevalence of a whitepaper. A whitepaper serves as both a persuasive sales pitch, and in-depth report on a specific topic that presents a problem and provides a solution. Most marketers relied on whitepapers to educate their respective audience about a particular issue, or explain and promote a particular methodology that an ICO could potentially solve. The information enclosed in whitepapers have historically been met with skepticism.Why ICOs Have Fallen Out of FavorThis is due in large part to the early days of ICOs, as this practice was highly unregulated and extremely risky. Because there were no regulations delineating who could and could not hold an ICO, many bad actors or incompetent technologists saw the practice as an opportunity to grab a lot of fast cash.As a result, many investors have lost quite a lot of money – their tokens were either never returned to them, or the companies who issued the tokens failed within several months of the token’s official launch.Regulators around the world have cracked down on the practice, which has resulted in a slightly “cleaner” ICO space.However, ICOs have garnered a pretty bad reputation and are still regarded as generally untrustworthy. As such, other methods of fundraising, such as Initial Exchange Offerings (IEOs) and Security Token Offerings (STOs) have been born. Read this Term) of Bitcoiin, which was being promoted by the famous actor Steven Seagal.
Discover credible partners and premium clients at China’s leading finance event!
The statement noted: “Bitcoiin has never been registered to sell securities in the State of New Jersey.”
It further explained the lack of information presented by the promoters of the project: “Bitcoiin's developers, officers, managers, employees, controllers, and/or directors are anonymous.”
The involvement of Steven Seagal brought the project into the limelight last month, however, the questionable business model of the project soon attracted criticism, and it was even compared to an MLM or pyramid scheme. The company, however, was quick to release an official statement negating all the allegations against it.
https://twitter.com/sseagalofficial/status/971109899261247488
In the order, the New Jersey Bureau of Securities also questioned the involvement of Steven Seagal in the ICO. As per the US Securities and Exchange Commission’s (SEC) directive, any celebrity involvement in an ICO promotion should disclose the nature, scope, and amount of compensation received in exchange for the endorsement.
The order explained: “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.”
In a statement, Attorney General Gurbir S. Grewal said: “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.”
Bitcoiin’s Response
Although the promoters of the project did not release any official statement after receiving the authority's cease-and-desist order, Asbury Park Press got in touch with a representative of Bitcoiin via email, who mentioned that the firm's lawyers are currently reviewing the order.
However, the representative pointed out that Bitcoiin is a utility token, not a security, and so it does not come under SEC radar. The company wrote: “Therefore we do not have to comply with SEC, and if ever we were supposed to we would do so.”