Two crypto startups have been charged by top financial regulator, the Securities and Exchange Commission (SEC), with defrauding unsuspecting investors by offering them unregistered digital securities. According to details of the complaints filed by the SEC, three individuals behind the startup defrauded investors of over $11 million for assets that performed far below what their backers say they could. The crypto project has ties to Steven Seagal, a Hollywood actor and martial artist.
The SEC is charging Start Option’s founder, Kristijan Krstic, and its chief marketer, John DeMarr, who told investors their platform is used for crypto trading and mining. While Bitcoiin2Gen, a “token” was labeled to be a sham by the authorities.
Krstic was said to have pulled out of the deal in 2018 after he had received over $9 million of investors’ funds and made no attempt to refund these investors. DeMarr, on the other hand, could not account for close to $2 million that he had raised from investors. The financial regulator alleges that DeMarr had made use of this fund for his personal benefit. The third person, Robin Enos, received over $10,000 for working with DeMarr and convincing unsuspecting investors to the platform.
According to the SEC, DeMarr had hailed Start Options as “the largest Bitcoin exchange in euro volume and liquidity.” This claim along with other untrue statements like “B2G tokens was mineable and tradeable” were used to market the exchange and the token to unsuspecting individuals.
Seagal Fined by The SEC
The financial regulator had earlier fined Steven Seagal for his role in promoting and marketing the B2G token in 2020. The Hollywood actor had received $175,000 from the platforms to help them market the token, however, he failed to mention this to his teeming supporters.
Seagal was asked to pay a fine of over $300,000. Then, he was ordered to refund $157,000 to the B2G token platform and to pay another $157,000 into the coffers of the authorities.
The token was soon discovered to be worthless and the authorities began its crackdown on the platform’s executives. The financial regulator is currently demanding the courts to grant financial penalties, disgorgement and interest for investors. DeMarr would also be facing criminal charges that were filed against it by the Department of Justice.