Bitcoin knockoff, Bitcoiin, gets regulatory warnings

The Securities Division of the Tennessee Department of Commerce and Insurance (TDCI) in New Jersey and Tennessee are sending clear signals that investors should steer clear of a cryptocurrency endorsed by faded action-film star Steven Seagal

Mike Richardson
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Bitcoiin (aka Bitcoiin2Gen) claimed to be based on the Ethereum blockchain, with a mining component via a partnership with Dragon Mining. Bitcoiin holders were promised “considerable profit from holding” the coin through staking or depository process. The project also offered affiliate rewards for people who can bring “investor interest” ahead of its token sale.

Steven Seagal is the brand ambassador for Bitcoiin 2nd Generation, or Bitcoiin2Gen, and according to CoinDesk, “Bitcoiin” has some features of a pyramid scheme.

Citing New Jersey's cease-and-desist order against the startup, the Tennessee report states that Bitcoiin was fraudulently offering unregistered securities in violation of the Securities Law,” and that investors should “be cautious when investing in cryptocurrencies.” The watchdogs identify several signs of questionable investments, including guarantees of high returns and low risk, social media advertising, and “pressure to buy immediately.”

The New Jersey regulators also take issue with Seagal’s involvement, saying it’s unclear what expertise he has, if any, that will help Bitcoiin operate “in compliance with federal and state securities laws.”

Seagal has tweeted several times about “Bitcoiin,” often with the hashtag #ad, as the project seeks to attract investors to its Initial Coin Offering, or ICO.

New Jersey's attorney general, Gurbir Grewal, said at the time that "while celebrity endorsements can add to the excitement and hype of cryptocurrency-related investments, they do not guarantee that an investment is sound or even legal."