Rapper T.I. and four others have been charged by the SEC for a fraudulent crypto operation
American rapper T.I, alongside four individuals, have been charged in a fraudulent cryptocurrency scheme. According to the US Securities and exchange Commision (SEC), T.I. and three others have agreed to settlements to resolve the charges against them. However, the fourth individual, 46 year old Atlanta film producer Ryan Felton, has not agreed to settle with the SEC.
Rapper TI will be shelling out $75,000 for the settlement.
The US Attorney’s office also revealed that Felton is facing federal criminal charges after an indictment by a federal grand jury.
The SEC accused T.I, Felton, and the three other unidentified individuals of promoting unregistered and fraudulent initial coin offerings (ICOs). These operations were reportedly controlled by Felton.
FliK and CoinSpark, two companies also allegedly controlled by Felton, were also charged by the SEC.
According to officials, Felton raised funds by making promises to build a digital streaming platform for FLiK as well as a digital asset trading platform for CoinSpark. Instead, Felton appeared to have transferred FLiK tokens to himself and then sold them on the open market. This generated an additional $2.2 million in profits for Felton.
“The federal securities laws provide the same protections to investors in digital asset securities as they do to investors in more traditional forms of securities…as alleged in the SEC’s complaint, Felton victimized investors through material misrepresentations, misappropriation of their funds, and manipulative trading,” the SEC said of Felton.
Special Agent In Charge of FBI Atlanta, Chris Hacker, added that Felton fooled investors by convincing them that their funding would be used in two innovative ventures.
“Instead, every penny went to support the suspect’s lavish personal lifestyle. It is a sad reminder to investors to be very careful where they entrust their money, but also a reminder to anyone motivated by greed that the FBI and our federal partners are committed to holding them accountable for their actions.” he concluded.
The SEC also said that T.I. acknowledged that he used his social media accounts to offer and sell FLiK tokens. He also falsely claimed he was a co-owner of FLiK.
Furthermore, T.I. also admitted to asking a fellow celebrity to promote the FLiK ICO on social media, with T.I. providing the content for the posts.
William Sparks Jr, T.I’s social media manager, alongside Owen Smith and Chance White, promoted the SPARK tokens but did not tell the public they were being paid to promote it.