The SEC alleges that T.I. used his social media platform to endorse the FLiK token. A different man, Ryan Felton, is being charged with embezzling over $2 million in ICO funds.
Clifford Harris, Jr., also known as T.I., a rapper, and actor, is being charged by the U.S. Securities and Exchange Commission (SEC) for promoting an unregistered preliminary coin offering. The other four persons were arrested; this includes Ryan Felton, a film producer from Atlanta.
SEC stated that Felton had raised money thru ICOs for a streaming platform named FLiK, and CoinSpark, a digital platform for digital trading assets. Felton has been alleged by the SEC that as an alternative, he transferred FLiK tokens to his account and later sold them for $2 million, which he used to “buy a Ferrari, a million-dollar home, diamond jewelry, and other luxury goods.”
T.I., a star of Hollywood films like Ant-Man and Dolemite Is My Name, was accused as a hype man for the venture. According to SEC, he falsely claims to be a FLiK co-owner as he persuades his fans to invest.
Earlier this year, T.I. appeared to have dodged a bullet, when a U.S. District judge dismissed from a class-action lawsuit over the FLiK ICO. Angry investors have been accusing Felton and T.I. of promoting unregistered security and then leaving the FLiK token after it reached $0.21.
T.I.’s social media manager, William Sparks, Jr., has been dragged by the SEC’s net and also film industry workers Chance White and Owen Smith. They supposedly promoted CoinSpark, not mentioning they had been paid to do so.
However, SEC did not charge the actor and comedian Kevin Hart, who FLiK investors named in an amended version of the lawsuit, later accusing him of being part of the pump scheme. The lawsuit is still ongoing as of now.
The SEC complaint, on the other hand, says that at Felton’s command, T.I. had arranged for the “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.”
All charges by the SEC have been settled except Felton’s. T.I. will later pay $75,000 as a penalty, and he agreed to stay away from digital asset promotions for the next five years. Sparks, Smith, and White will pay $25,000 as a penalty and are banned from digital asset security sales for the following five years.
The SEC associate director in the Division of Enforcement, Carolyn Welshhans, stated in a release;
Felton is now facing criminal charges.