Rapper TI to Pay $75000 Fine for Promoting Fraudulent ICO

Daniel Fowler
September 14, 2020

The U.S. Securities and Exchange Commission has announced charges against rapper T.I. along with film producer Ryan Felton, and three other individuals for defrauding roughly two dozen investors promoting fraudulent initial coin offerings from the companies FLiK and CoinSpark. Surprisingly, it was all a ruse as the SEC claim that Felton took the money from FLiK and used it to drive up the price of a second ICO, CoinSpark.

According to the SEC statement, Felton "allegedly misappropriated the funds raised in the ICOs", resulting in more than $2 million in losses for investors, per the Department of Justice. Aside from Felton, all of the individuals have agreed to settlements to resolve the charges against them. His attorney Henry E. Mazurek said T.I. regretted getting involved with Felton, whom T.I. had believed to be a local entrepreneur trying to make it easier for new artists to enter the music industry.

Felton claimed to build a digital asset trading platform for Flix tokens and a digital trading platform.

The SEC says that the fund was owned by movie producer Ryan Felton - who allegedly stole all the money.

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Disgruntled investors ended up suing T.I. and Felton back in 2018 but the securities fraud charges against him were later dismissed by a Georgia judge. T.I.'s social media manager was also accused of offering and selling FLiK tokens via T.I.'s social media accounts.

T.I. promoted FLiK tokens to his social media followers in 2017, falsely stating that he was a co-owner of the "Netlifx on the blockchain", which was advertised as creating a streaming media platform with products that could be purchased with digital tokens, the SEC said in a statement Friday. Smith, Sparks, and White have also agreed to pay a $25,000 fine each. They are also banned in any kind of participation in digital assets for five years.

The SEC’s investigation was conducted by Virginia M. Rosado Desilets and David H. Tutor, and supervised by John O. Enright, David A. Becker, Ms. Welshhans, and Cyber Unit Chief Kristina Littman.

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