The SEC accused the rapper of being involved in a scheme that produced $2.2 million in profits for an Atlanta film producer
Rapper T.I. has been named in an investigation of a cryptocurrency scheme involving four others.
A Friday press release by the U.S. Securities and Exchange Commission (SEC) stated that the Grammy-winning rapper was promoting “unregistered and fraudulent initial coin offerings (ICOs)” led by an Atlanta film producer.
The film producer, Ryan Felton, had been receiving ICOs from people as investments for a streaming service he said he was creating for a company called FLiK, as a digital-asset trading program for a company called CoinSpark.
The SEC indicated that Felton misappropriated those invested funds by using them for personal items. Prosecutors say the items include a $180,000 Ferrari and a $1.5 million mansion, WSB-TV reports.
The SEC’s release state that he pocketed $2.2 million in total profits.
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T.I., who’s real name is Clifford Harris, Jr., had been promoting FLiK coin offerings as well as selling ICO tokens via his social media. The SEC report also indicated T.I. falsely stated that he was a co-owner of the company.
T.I.’s social media manager, William Sparks, Jr., was also selling FLiK tokens, using the rapper’s social media accounts to do so. Two others, Atlanta residents Chance White and Owen Smith, were also promoting fraudulent tokens from CoinSpark.
None of the four had disclosed that they had each received compensation from promoting the tokens.
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Felton faces criminal charges of “violating registration, antifraud, and anti-manipulation provisions of the federal securities laws,” according to a complaint filed in U.S. District Court for the Northern District of Georgia. WSB-TV reports his investigation is now being conducted by the FBI.
T.I. has been ordered to pay a civil monetary penalty of $75,000 and is barred from selling or participating in digital-asset securities for five years.
Sparks has been charged with violating registration provisions, while he and White have to pay $25,000 in fines.
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