Three Bitcoiin Associates Charged With Fraud by SEC

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  • The founder and two promoters of Bitcoiin have been charged with fraud by the SEC
  • Bitcoiin claimed to be the “2nd generation of the original Bitcoin” but was allegedly a scam designed to enrich the creators and promoters
  • Bitcoiin was promoted by actor Steven Seagal, who settled with the SEC over his role

Three associates of Bitcoiin, a cryptocurrency promoted by veteran actor Steven Seagal, have been charged by the Securities and Exchange Commission (SEC) with defrauding investors. In another example of the lawlessness that existed in the ICO boom of 2017 and 2018, Bitcoiin raised $11 million through two unregistered ICOs the SEC says featured material that the creators knew to be incorrect, while the associates pocketed much of the money.

Bitcoiin a Scam From The Off

Bitcoiin was a cryptocurrency created by BitcoiinGen2 founder Kristijan Krstic, who enlisted the help of John DeMarr and Robin Enos to promote the project. Bitcoiin aimed to piggyback on the Bitcoin craze, calling their token the “2nd generation of the original Bitcoin”. The project was a clear scam, which is obvious from the name alone, but hundreds of naïve investors still piled in, with most of the money going towards paying Steven Seagal to promote the coin and line the creator’s and promoters’ pockets.

Bitcoiin attracted notoriety in February 2018 when it hired Seagal to front it, leading to criticism in over its likeness to a pyramid scheme, to which it responded indignantly at the time:

Of course, we are not an MLM company or any Pyramid Scheme or Scamming people, all of these allegations are false and just an attempt to discourage people from becoming a part of the Bitcoiin2Gen, Crypto-Currencies, and Crypto-economies.

However, the SEC has alleged that scamming people was exactly what Bitcoiin2Gen was doing, stating that “Bitcoiin2Gen was a sham, and Krstic and DeMarr allegedly misappropriated millions of dollars of investor funds for their own personal benefit.”

Project Collapsed in 2018

While the stated aim of Bitcoiin was “to make a superior or more advanced version of Original Bitcoin”, Kristina Littman, Chief of the SEC Enforcement Division’s Cyber Unit, summed up the real purpose of the project as far as the SEC is concerned:

“The conduct alleged in this action was a blatant attempt to victimize those interested in digital asset technology and these defendants should be held accountable. In reality, we allege, these ventures were fraudulent enterprises aimed simply at misappropriating funds from investors.”

Bitcoiin came to an indignant end in 2018 when the founders quit, Seagal settled with the SEC over his involvement, and the project collapsed a month after the token listed on exchanges.