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 celebrity they say contributed to the alleged fraud: the second-highest paid comedian in the world, Kevin Hart.
The Flik ICO investors claim they collectively forked over more than $1.3 million for what turned out to be “worthless” Flik tokens sold as “unregistered securities” in late 2017. They say they were “duped” by Felton, T.I., and Hart through a series of social media posts and celebrity endorsements, as well as promises from Felton of a nearly 25,000 percent return on their investments, according to court documents.
Representatives for Felton, T.I., and Hart could not be reached for comment, though T.I has previously denied any part in the Flik ICO. T.I.’s attorney, Albert A. Chapar, told The Blast last November that his client “did not receive a single dollar from Felton” nor “did he have any ownership of the company,” despite a deleted tweet in which T.I. referred to Flik as his “new ICO.”
Following the token sale, the price of Flik tokens spiked from $.06 to $.21—at which point the investors claim Felton and T.I. “dumped” their tokens on the secondary market and vanished. What’s more, the lawsuit alleges that Felton then attempted to wash his hands of Flik by creating a “sham company” called Skyblock Media Group, LLC to “acquire” Flik, while representing to investors that he had nothing to do with the new firm.
Indeed, very few traces of Flik remain on the internet—the Flik website, Facebook page, and Skyblock site have all been deleted—and all that endures is a seemingly abandoned Twitter account, which has been scrubbed of all its posts.
Kevin Hart’s offending social media posts, however, are still online:
Along with the tweet, Hart posted a photo of himself with T.I on Facebook in September 2017 with the caption: “Me telling [T.I.] how much help he gon need spending all that money he gonna make on his new venture. Lmfao But seriously, I'm Super Excited for T.I. and FLiK They're gonna crush it! #ICO #blockchain #crypto #bitcoin.”
The Flik investors claim Hart “materially aided” in the alleged fraud and are seeking no less than $7 million from Hart over his role in ICO. The lawsuit alleges Hart either knew, or should have known, about the supposed swindle and claims Hart profited from his public endorsement of Flik. The complaint also claims that Felton led investors to believe that Hart would have an important role within the company, potentially even becoming a part owner.
“Members of the group assumed that Hart would become the ‘face’ of FLiK, which Felton did not dispute,” the lawsuit alleges.
Hart isn’t the first big-name celebrity to be hit with an ICO-related lawsuit. Floyd “Money” Mayweather and DJ Khaled are both facing lawsuits and were sanctioned by the SEC over their role in promoting the Centra Tech ICO, whose founders still face a litany of criminal fraud charges.