The Securities and Exchange Commission announced bringing charges against film producer Ryan Felton, rapper and actor Clifford Harris, also known as T.I. and three others. Each of the defendants promoted one of Felton’s two unregistered and fraudulent initial coin offerings (ICOs).
The Commission also charged the two companies controlled by Felton that conducted the ICOs, FLiK and CoinSpark. All defendants except for Felton have agreed to settlements to resolve the charges against them.
The US watchdog alleges in its complaint that Felton promised to build a digital streaming platform for FLiK and a digital-asset trading platform for CoinSpark with the funds raised in the ICOs. Instead, Felton misappropriated those funds, according to the complaint.
The SEC also alleges that Felton secretly transferred FLiK tokens to himself. He then sold them into the market, reaping an additional $2.2 million in profits and that he engaged in manipulative trading to inflate the price of SPARK tokens. The SEC claims that Felton used the funds and proceeds to buy a Ferrari, a million-dollar home, diamond jewelry and other luxury goods.
The Commission found that T.I. sold FLiK tokens on his social media accounts. He claimed to be a co-owner of FLiK and encouraging his followers to invest in the platform’s ICO. T.I. also asked a celebrity friend to promote the FLiK ICO on social media and he provided, calling FLiK as T.I.’s “new venture.”
