US securities regulators announced on February 27 2020 they had fined actor Steven Seagal and suspended him from investment promotions over charges he hawked a cryptocurrency venture without disclosing compensation. File Picture: KIRILL KUDRYAVTSEV/AFP
US securities regulators announced on February 27 2020 they had fined actor Steven Seagal and suspended him from investment promotions over charges he hawked a cryptocurrency venture without disclosing compensation. File Picture: KIRILL KUDRYAVTSEV/AFP

Steven Seagal may have starred in Above the Law, but it turns out he isn't in real life.

The 67-year-old Hollywood actor, who also appeared in Under Siege, became the latest celebrity punished by the US Securities and Exchange Commission (SEC) for failing to disclose that he was being paid to promote a digital token.

Seagal was promised $250,000 (R3.8m) in cash and $750,000 worth of tokens for touting an initial coin offering (ICO) from a company called Bitcoiin2Gen, the SEC said this week.

In social media posts, Seagal urged fans not to miss out on the token offering. A media release also identified him as Bitcoiin2Gen's brand ambassador.

He agreed to settle the SEC's allegations without admitting or denying wrongdoing, and will pay a $157,000 fine and the same amount in disgorgement, the regulator said.

Seagal now lives in Moscow, according to the SEC's order. In August 2018, the Russian foreign ministry named him a special representative to improve relations between Russia and the US, according to a posting on Facebook.

The actor agreed to let his likeness be used to promote Bitcoiin2Gen's token after consulting with counsel, according to an
e-mail from his lawyer.

Later on, Seagal became concerned that the project wasn't legitimate and terminated the relationship.

"Mr Seagal co-operated fully with the SEC's investigation, and this matter is now behind him," the e-mail said.

"He looks forward to continuing his life's work as an actor, musician, martial artist and diplomat."

Celebrity endorsements of ICOs - in which companies raise money by selling digital tokens instead of shares - became increasingly common as bitcoin surged to a record high in 2017.

All the hype prompted the SEC to publicly warn that pitches could be unlawful if the famous backers' compensation wasn't disclosed.

In 2018, the SEC accused boxer Floyd Mayweather and music producer DJ Khaled of failing to disclose that they had received payments for hyping ICOs.

Mayweather, one of his sport's most recognisable personalities, agreed to pay more than $600,000 to settle with the regulator.

DJ Khaled agreed to pay more than $150,000.

Bloomberg