Rapper TI along with 4 other individuals, & filmmaker Ryan Felton, are charged by the United Stated SEC over illicit token sales. TI, or Tip is additionally fined for $75K by the regulators.
Within a recent official announcement by the SEC, it has charged renowned rapper & actor Clifford Harris Jr., filmmaker Ryan Felton, along with three other individuals for 2 ICOs [Initial Coin Offerings]. The SEC also charged 2 firms, Flik & Coinspark, that proceeded with the sales.
Rapper TI, whom the SEC itself identifies as “a well-known musician, actor, and producer,” participated within the offer and sale of flik token’s, which were unregistered securities. Investors were able to purchase & sell these tokens on 2 exchanges using Ethereum [ETH] & Bitcoin [BTC], the SEC added. “Promotional materials described Flik as ‘Netflix on the blockchain’ – a firm that would offer a streaming media platform with products and services that can be purchased using flik tokens.”
The SEC alleged that somewhere between 20th Aug. & 20th Sept. 2017, the rapper offered & sold these token’ on his social media accounts, falsely claiming to be a Flik co-owner, and even asked his star friend to market the sale on his social media accounts too, calling flik TI’s “new venture.” The Flik sale was able to raise around 539 Ethereum [ETH], worth around $164,665 USD as of 20th Sept. 2017, the SEC’s order states, adding:
As per SEC’s order, T.I. requires him to pay a $75k civil monetary penalty and not participate in offerings or sales of digital-asset securities for at least 5 years.
In line with a recent report by Reuters, TI neither admitted nor denied the SEC’s findings. His attorney Henry E. Mazurek added that the rapper regretted collaborating with Felton, whom he “believed to be a native entrepreneur trying to form it easier for new spanking new artists to enter into the music industry,” Reuters added. The lawyer additionally claims that TI “never received a dollar” from Felton’s failed venture investment scheme.
Additionally, the SEC detailed that filmmaker Felton allegedly promised to create a digital streaming platform for Flik and a cryptocurrency trading platform for Coinspark, but he misappropriated the funds raised. He secretly transferred flik tokens to himself & then illicitly sold them for over $2.2 Mln for profits. He also engaged in manipulative trading to inflate the worth of spark token’ & employed the illicit gotten funds to purchase a Ferrari, a million-dollar home, diamond jewelry, along with several other luxury goods.
The complaint charges Felton with violating registration, antifraud, as well as anti-manipulation provisions of the federal securities laws. Flik and Coinspark are charged with violating the registration as well as anti-fraud provisions.
Besides Felton, all persons have agreed to settlements to resolve the complaints against them. Moreover, the United States Attorney’s Office for the Northern District of Georgia has simultaneously brought criminal charges against Felton. The proposed settlements are subject to court approval.