Steven Seagal just learned the hard way that, unlike the title of his 1988 police action movie, he is not Above the Law. Unfortunately for the prolific action movie star, the SEC took notice of his recent actions and was Out for Justice. In order to avoid a Maximum Conviction, the SEC recently announced that Seagal made the Executive Decision to settle charges brought by the agency related to the actor’s failure to disclose the nature, scope, and amount of compensation he received for promoting an investment in an initial coin offering (ICO) conducted by Bitcoiin2Gen.

The SEC has taken the position that cryptocurrency coins/tokens may qualify as “securities,” and celebrities or other individuals who promote cryptocurrency may run afoul of the federal securities laws if they fail to make adequate disclosures of the compensation they received in exchange for the promotion. One could think of this as a Code of Honor, but the SEC calls it the anti-touting provisions of the Securities Act of 1933. Specifically, Section 17(b) states:

It shall be unlawful for any person . . . to publish, give publicity to, or circulate any notice . . . or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof.

This broad language makes the anti-touting provision The Perfect Weapon for the SEC to go after issuers who seek to use well-known individuals to promote risky cryptocurrency products to vulnerable populations. Indeed, the SEC has previously used this provision to go after other celebrities for similar conduct, including boxer Floyd Mayweather Jr. and music producer DJ Khaled.

Seagal found himself in the Belly of the Beast when he promoted the ICO on his social media accounts and issued a press release titled “Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2Gen.” He also permitted the company to issue a press release that included a quote demonstrating his strong endorsement. In exchange for this publicity, Seagal was promised $250,000 in cash and $750,000 of the company’s coins.

As a result of the settlement, Seagal was ordered to pay over $330,000 in disgorgement, civil penalties, and interest. Seagal also agreed not to promote any security for a period of three years. With Exit Wounds this severe for the well-known movie star, this case should serve as a stark reminder that the SEC is committed to examining all aspects of ICOs and cryptocurrencies with a careful eye. If the SEC catches wind of similar conduct by other celebrities, future cases could be Hard to Kill.