Bitcoiin B2G ICO Under Scrutiny by New Jersey Authorities

The recently announced Bitcoiin ICO raised many red flags for the crypto community, leading regulators to step in. The New Jersey authorities, with a history of cracking down other dubious crypto projects, issued an emergency Cease and Desist order.

The authorities stressed the aggressive marketing of the project:

"Seeking to capitalize on the popularity of the cryptocurrency Bitcoin (with one “i”), Bitcoiin offers its own cryptocurrency and other crypto-related investments through its website (www.bitcoiin.com), social media, and its purported official brand ambassador, actor Steven Seagal."

BITCOIIN HITS ITS SOFT CAP IN RECORD FASHION https://t.co/huit2Ge4tz via @Bitcoiin2G

The fault that authorities found this time recalls the crackdown against BitConnect and Davor Coin. The usage of a referral program with "agents" targeting new buyers was considered illegal, as none of the participants in the program were registered agents by New Jersey laws.

The regulator also considers the Bitcoiin tokens to be unregistered, non-exempt securities. The order papers also underline the fact that there are many elements of a pyramid scheme regarding the token sale event and affiliate and referral programs.

The response of the Bitcoiin team was to tighten the KYC procedure and exclude New Jersey residents. Unfortunately, this does not protect other investors from the risks inherent to the project.

Fortunately, the Bitcoiin project has not seen much popularity among the crypto community. But sometimes, schemes that are not at the center of crypto-based discussions on social media manage to target new buyers that are not so knowledgeable about crypto coins.

The promotion by Steven Seagal, who himself has disclaimed ownership of B2G assets, continued until a few days ago:

Friends, I wanted to announce that @Bitcoiin2Gen will soon be listed on some of the biggest exchanges globally. Stay tuned for more information coming very shortly. https://t.co/tya7c3rrwr #bitcoiin #Ad

The crackdown on the Bitcoiin2G project is a part of the new climate where US authorities are watching the crypto space much more closely. In the case of overhyped earning schemes, the risk mostly pertains to personal finance.

B2G tokens have an ICO price of $5. But due to the plan for an internal exchange, there were outright promises on the B2G website that the token would be worth $388 in December 2018.

This recalls the regular blog posts of BitConnect, which manipulated the BCC price to ensure a steady flow of Bitcoin from newcomers, and managed to survive for a long time by the standards of pyramid schemes.