Start Options billed itself as the largest Bitcoin exchange by trading volume in euros. The defendants are allegedly involved in the ICO’s fraud of the year 2017.
The image of action movie actor Steven Seagal fueled the Bitcoiin2Gen Initial Cryptocurrency Offering (ICO) in 2017. The US Securities and Exchange Commission (SEC) recently charged the promoters of said ICO with fraud. The regulatory agency has also accused them of being allegedly involved in various cryptocurrency frauds, in addition to the ICO that the actor touted.
The SEC filed a complaint against Kristijan Krstic, founder of Bitcoiin2Gen and Start Options, and promoters John DeMarr and Robin Enos. The agency said that those men defrauded investors out of more than USD 11 million through these companies. Their purpose was alleged to induce investors to buy digital asset securities known as B2G tokens, which would be deliverable on the Ethereum network.
The defendants also allegedly promised to use investors’ funds to develop a “mineable” currency. They told the victims that they could trade the tokens on their cryptocurrency trading platform. Besides, they promised to launch the platform in 2018 but excluded actor Steven Seagal from the current indictment.
In that complaint, the SEC alleges that the promises about the B2G tokens were false and Bitcoiin2Gen was a scam. They also said that Krstic and DeMarr appropriated millions of US dollars from their investors’ funds for their benefit.
Start of the Fraud with Bitcoiin2Gen
According to the SEC, Krstic and DeMarr created alleged cryptocurrency trading and mining platform Start Options in December 2017. The agency said that they lied that “it was the largest Bitcoin exchange by trading volume and liquidity in euros.” Furthermore, the defendants were constantly promoting it as the best and most secure Bitcoin exchange through independent news media.
The SEC accused Krstic and DeMarr of violating the anti-fraud and registration provisions of the federal securities laws. They also charged Enos with helping incite the anti-fraud violations. The complaint seeks precautionary measures and restitution plus interest, in addition to fines and a ban on operating and directing companies in the future.
In parallel, the Attorney General’s Office for the Eastern District of New York and the Department of Justice, Fraud Section, announced charges against DeMarr.
Image of Actor Steven Seagal Promotes Bitcoiin2Gen Scam
The men that the SEC charged with fraud had scammed investors with Bitcoiin2Gen, as well as actor Steven Seagal, according to news media. They allegedly promised USD 750,000 in B2G tokens and USD 250,000 in cash to the actor for promoting the Bitcoiin2Gen ICO in 2018. However, Seagal noted that he had only received USD 157,000 for closing that deal.
The martial arts expert agreed to pay USD 314,000 in fines for two different charges. Furthermore, he promised that he would not promote any securities, digital or otherwise, for three years.
That same year, the cryptocurrency project Bitcoiin announced that actor Steven Seagal was ending the relationship with them. He would no longer remain the brand’s ambassador after the Initial Coin Offering concluded.
The founders were also abandoning the project to make the cryptocurrency “genuinely anonymous.” They were seeking to imitate Bitcoin to make the token appear genuine. Authorities in Tennessee issued a warning about the project, and those in New Jersey ordered them to cease operations.
By Alexander Salazar
