Nineties action movie star Steven Seagal is throwing his name behind a cryptocurrency startup called Bitcoiin 2Gen. The name of the cryptocurrency is not a typographical error.
Bitcoiin 2Gen does not have a value yet as it is still preparing to go through an initial coin offering (ICO) to determine its value. This early, however, it has a handful of issues if examined thoroughly.
Information currently available on Bitcoiin is scarce. Its website fails to include who is behind the ICO or who is paying Steven Seagal.
On its whitepaper, there are many claims about the cryptocurrency. It is described as the first "self-sustaining" cryptocurrency without explaining what this claim means for the company.
Bitcoiin claims to have 2G technology based on the Ethereum blockchain. To further complicate matters, it lists its business location on the whitepaper as anonymous.
There are no details about who is behind Bitcoiin. The domain for the cryptocurrency was registered in 2015 in Panama, and it changed owners in the beginning of January according to Mashable.
Bitcoiin does not do itself any favor by showing a recruitment plan on the whitepaper, which essentially looks like a pyramid scheme. Using the actual shape, it depicts a four-level recruitment plan that is not detailed.
A press release by Bitcoiin announces Seagal as brand ambassador while touting his many accomplishments. Seagal is described as "Zen Master" by the company and is shown using an old Chinese saying.
SEC Warning on ICOs
The Securities and Exchange Commission previously issued a statement warning people about the dangers of celebrity-backed ICOs. In the statement, the SEC goes on to say that this involvement could possibly be illegal due to the lack of disclosure behind cryptocurrencies.
"Celebrities and others are using social media networks to encourage the public to purchase stocks and other investments," the SEC warns in a statement in November 2017. "These endorsements may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement."
The SEC urges caution when investing into cryptocurrencies that feature celebrity spokespersons, like what Bitcoiin is doing. It further advises that consumers should do a large amount of research on the subject before investing, and that relying on the word of celebrities may not the best investing advice.
SEC goes on to note that while the endorsement may seem like an unbiased recommendation, it could be a paid promotion. It warns that the people endorsing the cryptocurrency may not have a background or expertise on the subject to be able to provide a recommendation.