In brief
- Rapper and actor T.I. has settled charges with the SEC over his alleged promotion of a fraudulent initial coin offering for FLiK.
- T.I. and film producer Ryan Felton were defendants in a lawsuit from FLiK investors, who accused them of pumping and dumping the token.
- Actor and comedian Kevin Hart was named as defendant in an amended complaint regarding the FLiK ICO but has not been charged by the SEC.
The US Securities and Exchange Commission (SEC) has charged Clifford Harris, Jr., aka T.I., a rapper and actor, with promoting an unregistered initial coin offering. Four others were also charged, including Ryan Felton, an Atlanta film producer.
According to the SEC, Felton raised money via ICOs for FLiK, a streaming platform, and CoinSpark, a platform for trading digital assets. The SEC alleges that Felton instead transferred FLiK tokens to his own account and sold them in exchange for over $2 million, which he used to "buy a Ferrari, a million-dollar home, diamond jewelry, and other luxury goods."
T.I., star of Hollywood films including Ant-Man and Dolemite Is My Name, was allegedly a hype man for the venture. The SEC says he claimed, falsely, to be a FLiK co-owner as he pushed his fans to invest.
T.I. seemed to have dodged a bullet earlier this year, when a US District judge dismissed him from a class-action lawsuit over the FLiK ICO. Angry investors had accused Felton and T.I. of promoting an unregistered security then dumping the Flik token after it reached the price of $0.21 (it's currently worth next to nothing, and the project website hasn't worked in over a year).
The SEC's net dragged in T.I.'s social media manager, William Sparks, Jr., as well as film industry workers Chance White and Owen Smith, who allegedly promoted CoinSpark without mentioning they had been paid to do so.
The SEC did not, however, charge actor and comedian Kevin Hart, who FLiK investors named in an amended version of the lawsuit, accusing him of being part of the pump scheme. That lawsuit is ongoing.
Comedian Kevin Hart faces multi-million dollar ICO lawsuit
An ICO investor walks into a courtroom—stop us if you’ve heard this one. Last November, a group of investors in Flik—a blockchain-based funding and distribution network for the entertainment industry—filed a class-action lawsuit over an alleged “pump and dump” scheme orchestrated by the company’s co-owners: music producer Ryan Felton, and rapper Clifford Harris (better known as T.I.). On Friday, those same 25 investors amended their complaint, filed in a Georgia federal court, to include another...
The SEC complaint, however, does say that, at Felton's behest, T.I. had arranged for "the FLiK ICO to be promoted on the Twitter, Instagram, and Facebook accounts of a well-known American actor, comedian, and producer ('Celebrity 1'), who, at the time of the FLiK ICO, had more than 34 million followers on Twitter."
According to the SEC, "The announcement of the FLiK ICO on Celebrity 1’s social media accounts also substantially amplified the reach of FLiK’s marketing campaign for the FLiK ICO."
$25 million ICO backed by Floyd Mayweather was a fraud, founder admits
Robert Joseph Farkas, the co-founder of crypto startup Centra Tech, which raised more than $25 million in an initial coin offering (ICO) in 2017, pled guilty today to conspiring to commit securities and wire fraud. The Miami-based Centra Tech employed celebrities such as boxer Floyd Mayweather and DJ Khaled to hawk its ICO, which promised development of a “Centra Card” that could be used at VISA and Mastercard terminals to make payments via cryptocurrency holdings. However, it was all a massive...
Of those charged by the SEC, all except Felton have settled. T.I. will pay a $75,000 penalty and has agreed to stay away from digital asset promotions for five years. Sparks, White, and Smith will pay $25,000 each as a penalty and be barred from digital asset security sales for five years.
Carolyn M. Welshhans, the SEC associate director in the Division of Enforcement, said in a release, “As alleged in the SEC’s complaint, Felton victimized investors through material misrepresentations, misappropriation of their funds, and manipulative trading.”
Felton now faces criminal charges.
