SEC fines rapper T.I. for promoting fraudulent ICOs

Rapper Clifford Harris Jr., known by the stage name T.I., has agreed to settle SEC charges over promoting a fraudulent ICO.

SEC charges film producer, rapper, and others for participation in two fraudulent ICOs https://t.co/zAp7ZlL4ov

— SEC_News (@SEC_News) September 11, 2020

In 2017, T.I. promoted on social media the ICO of a blockchain-based streaming service called FLiK, claiming to be a co-owner, but this was not true.

FLiK was controlled by producer Ryan Felton, who unlawfully misappropriated the funds raised in the ICO, according to the SEC. This led to investor losses of more than $2 million.

Felton also secretly transferred FLiK tokens to himself and sold them on the market, earning an additional $2.2 million, according to the SEC.

The regulator also suspects the businessman of manipulating the SPARK tokens of another ICO — the CoinSpark platform for trading digital assets.

“Felton allegedly used the funds he misappropriated and the proceeds from his manipulative trading to buy a Ferrari, a one-million-dollar home, diamond jewelry and other luxury items,” the statement said.

In promoting fraudulent ICOs, the SEC charged Felton and TI along with three other Atlanta residents. All, except the producer, agreed to settle the charges.

T.I. will pay a civil penalty of $75,000 and, for at least five years, will not participate in “the offering or sale of securities with digital assets.”

Three other defendants — TI’s social media manager William Sparks Jr., Chens White and Owen Smith — also agreed to the same prohibition. For their participation in promoting the CoinSpark ICO, they will pay a $25,000 fine.

SEC accuses Felton of violating federal securities laws relating to registration, anti-fraud provisions and manipulation. The U.S. Attorney’s Office for the Northern District of Georgia has brought criminal charges against the entrepreneur.

Back in 2018, 25 investors filed a lawsuit against Felton and T.I. over the FLiK ICO.

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