Steven Seagal is the brand ambassador for a controversial cryptocurrency, Bitcoiin2Gen.
Last week film star Steven Seagal known for his movies Under Siege and Hard to Kill, became the latest celebrity to endorse and then Tweet support for a new cryptocurrency trading company.
Mr Seagal who is also a Buddhist “tulku” is also now the brand ambassador for a new cryptocurrency called Bitcoiin2Gen.
The press release for the new coin says: “For Bitcoiin2Gen, the choice of Zen Master, Steven Seagal is obvious as brand ambassador, this extends our long-term commitment towards the community.”
The company credits Mr Seagal as being, “an American actor, producer, screenwriter, director, martial artist, and musician who holds American, Russian, and Serbian citizenship”.
It adds: “As a Buddhist, Zen teacher, and healer, Steven lives by the principles that the development of the physical self is essential to protect the spiritual man. He believes that what he does in his life is about leading people into contemplation to wake them up and enlighten them in some manner.
“These are precisely the objectives of the Bitcoiin2Gen, to empower the community by providing a decentralised P2P payment system with its own wallet, mining ecosystem and robust blockchain platform without the need of any third party.”
For Bitcoiin2Gen, the choice of Zen Master, Steven Seagal is obvious as brand ambassador, this extends our long-term commitment towards the community
Mr Seagal used his Twitter feed to promote the company to his 108,000 followers raising questions about the promotion of financial products by celebrities to their fans.
The US Securities and Exchange Commission has warned against the practice of celebrities promoting financial instruments and cryptocurrencies.
In a statement last November the agency said: “Celebrities and others are using social media networks to encourage the public to purchase stocks and other investments.
“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.”
Celebrity cryptocurrency endorsements are controversial
Speaking exclusively to Express.co.uk, Hollywood cybersecurity advisor, Ralph Echemendia, aka ‘The Ethical Hacker’ who has worked with NASA, Google, Microsoft, and advised award-winning director Oliver Stone on his Edward Snowden movie, says celebrity endorsements for cryptocurrencies only serve one purpose – bringing the message that people should invest in cryptocurrency to the masses.
He said: “People who would normally never even give cryptocurrencies a second look are now seriously considering the investment, following familiar faces down the digital path.
“It’s the mentality of, ‘if these high-profile celebs are doing it, so should I.’
“But do consumers really know what they are signing up for?”
Mr Echemendia said the effects of celebrity endorsements “are still yet to be seen and felt”.
Gavin Brown, senior lecturer at Manchester Metropolitan University and co-founder of cryptocurrency hedge fund Blockchain Capital Limited, who told Express.co.uk has warned that cryptocurrencies created through ICO’s (Initial Coin Offerings) and the exchanges upon which they trade are increasingly being promoted and endorsed by celebrities.
Mr Brown says these unregulated and often poorly understood products are being championed by such celebrities in order to raise awareness via social media platforms thereby incentivising us – the retail customers – to purchase them so that the creators of these new coins can make large financial gains.
He said: “Celebrity endorsement of products is not a new phenomenon in marketing but the Securities and Exchange Commission (SEC) has recently warned celebrities that a failure to disclose their objectivity due to fees paid to them to endorse may be illegal and leave them open to prosecution.
“The SEC’s statement in November last year warned that, ‘any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion.
“A failure to disclose this information is a violation of the anti-touting provisions of the federal securities laws’.”
However, Mr Brown adds there is significant uncertainty as to whether cryptocurrencies or tokens meet the legal definition of securities and therefore may not be subject to the above provisions and the application of securities rules.
He said: “The key point is that presently technology is running ahead of the regulation.”
Cryptocurrencies are under close scrutiny
Earlier this week Lendingblock released a survey of 1000 millennials and household decision makers to gauge people’s attitudes to cryptocurrencies.
One question asked was “which of the following would make you more likely to buy cryptocurrencies?” Celebrity endorsement was an option, but it turned out to be the least popular among both groups.
At the top of the table, for millennials, “better Security, better apps, and government backing occupied the top three positions”.
Linda Wang, co-founder and COO of Lendingblock told Express.co.uk celebrity endorsements, like everything else in the crypto world, “can be bought”.
Ms Wang argues that the research shows that people don’t trust celebrities, and this is without doubt “a good thing”.
She said: “There’s no such thing as a celebrity financial advisor, and the public should shouldn’t confuse influencer endorsements and professional financial advice.
“The stats show that – regardless of age – people are actually looking for cryptocurrencies to become more secure.
“For this, celebrities can’t give cryptocurrencies the legitimacy they are looking for.
“What will increase uptake is greater regulation – so that people can trust their money is being looked after – and new apps and platforms that are easy to use but also give investors proper guidance and advice.”
Express.co.uk contacted Mr Seagal’s agents and Bitcoiin2Gen to confirm his role as brand ambassador, and find out the nature, source, and amount of any compensation paid, directly or indirectly, by the company Bitcoiin2Gen, in exchange for his endorsement.
Mr Seagal’s representatives have not responded.
Bitcoiin2Gen had told the Telegraph that, “Mr Seagal has millions of followers across the world, and by his influence now we are reaching to them, which was never possible through our other marketing strategies”. Express.co.uk has asked for comments on the use Steven Seagal’s fame and social media footprint to promote the purchase of a stock or an investment.
Express.co.uk contacted Bitcoiin2 to ask why benefits they had given to Steven Seagal for him to become their brand ambassador and whether those benefits should been disclosed in adverts and social media posts which feature Mr Seagal’s promotion of Bitcoiin2.
Bitcoiin2Gen has not responded.