Crypto Scam Starring Steven Seagal Cheated Investors Out of $11 Million

The platform claimed it ran giant crypto-mining farms in China, and could deliver between 25% and 200% returns within two months.
Loukia Papadopoulos

Would you trust a crypto fund supported by martial arts star Steven Seagal? Well, it seems nearly 500 investors did and got cheated out of $11 million.

The story, unfortunately like many others, goes like this: In 2017, Start Options, an online investment platform that provided cryptocurrency mining, trading, and digital asset trading services, started looking for investors, according to MarketWatch.

This platform was run by none other than Kristijan Krstic under the alias of Felix Logan. He used this alias because had been previously accused of running Ponzi schemes in Australia and Canada. Meanwhile, John DeMarr, a 55-year-old California private investigator, served as the frontman for the scam.

The platform claimed that it ran giant crypto-mining farms in China — similar in size to the recently-busted illegal crypto-mining farm in Ukraine — and could deliver between 25 percent and 200 percent returns within two months. False statements were also provided to investors showing their money was growing.

When investors started noticing something was wrong and asking for their money back, they were told their funds were being rolled over to the initial offering of a new cryptocurrency known as Bitcoiin2Gen (or B2G) that would deliver 8,000 times the return. This is the company that Steven Seagal promoted.

Needless to say, all this was a fraud. There were no crypto-mining farms in China and no new cryptocurrency. 

How it unraveled

In March 2018, Logan (Krstic) and Seagal announced they were leaving the company with Krstic disappearing completely with about $7 million in the accounts he had control over.

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DeMarr then made more false claims that the company had been acquired by Russian venture funds. Later on, in what is even stranger news, the company claimed that DeMarr had been assaulted in Montenegro and had disappeared, and thus came the end of this fraud saga. It turned out he was laying low in his home in California, per MarketWatch.

Now, the U.S. Department of Justice says that DeMarr faces up to five years in prison, and a broader criminal indictment against Krstic and 15 other defendants has been filed.

Seagal is also facing charges for not disclosing that he was being paid to be a spokesman for the firm, according to the U.S. Securities and Exchance Commission (SEC). Krstic's whereabouts remain unknown although the SEC believes he is in custody in Serbia.

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