Rapper TI has been prosecuted alongsides four others including film producer, Ryan Felton, on account of involvement in cryptocurrency fraud by the U.S. Securities and Exchange Commission (SEC). The rapper and his team have been charged over fraudulent token sales and fined $75,000 by the securities regulator.
Rapper TI and Film Producer Charged
The SEC announced Friday the charges against rapper and actor Clifford Harris Jr. (often known as TI or Tip), film producer Ryan Felton, and three others over two fraudulent initial coin offerings (ICOs). The SEC also charged two companies, Flik and Coinspark, that conducted the sales.
Rapper TI, whom the SEC described in its order as “a well-known musician, actor, and producer,” participated in the offer and sale of flik tokens, which are unregistered securities. Investors were able to buy and sell these tokens on at least two cryptocurrency exchanges using ETH and BTC, the SEC detailed. “Promotional materials described Flik as ‘Netflix on the blockchain’ — a company that would provide a streaming media platform with products and services that could be purchased with flik tokens.”
The SEC alleges that between Aug. 20 and Sept. 20, 2017, the rapper offered and sold these tokens on his social media accounts, falsely claiming to be a Flik co-owner, and asked a celebrity friend to promote the sale on social media, calling flik TI’s “new venture.” The Flik sale raised approximately 539 ETH, worth about $164,665 as of Sept. 20, 2017, the SEC’s order states, adding:
The SEC’s order against T.I. requires him to pay a $75,000 civil monetary penalty and not participate in offerings or sales of digital-asset securities for at least five years.
TI neither admitted nor denied the SEC’s findings, Reuters reported Friday. His attorney Henry E. Mazurek says that the rapper regretted getting involved with Felton, whom he “believed to be a local entrepreneur trying to make it easier for new artists to enter the music industry,” the news outlet conveyed. The lawyer additionally claims that TI “never received a dollar” from Felton’s failed venture.
In addition, the SEC detailed that film producer Felton allegedly promised to build a digital streaming platform for Flik and a crypto trading platform for Coinspark, but he misappropriated the funds raised. He secretly transferred flik tokens to himself and sold them for $2.2 million in profits. He also engaged in manipulative trading to inflate the price of spark tokens and used the ill-gotten gains to buy a Ferrari, a million-dollar home, diamond jewelry, and other luxury goods.
The complaint charges Felton with violating registration, antifraud, and anti-manipulation provisions of the federal securities laws. Flik and Coinspark are charged with violating the registration and anti-fraud provisions.
Besides Felton, all persons have agreed to settlements to resolve the charges against them. Meanwhile, the U.S. Attorney’s Office for the Northern District of Georgia has simultaneously brought criminal charges against Felton. The proposed settlements are subject to court approval.
“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,” said Carolyn M. Welshhans, Associate Director in the Division of Enforcement.
This article is sourced from:https://news.bitcoin.com