The SEC has charged rapper and actor T.I for promoting an unregistered initial coin offering on social media.
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Decrypt reports the rapper along with four others were charged for the fraudulent operations. The SEC said T.I. claimed to be a co-owner of the streaming platform FLiK and tried to convince fans to invest in the company via social media. Among the four suspects was Atlanta-based film producer Ryan Felton who allegedly raised funds using ICOs for FLiK and digital trading platform CoinSpark then transferred the FLiK coins into his personal bank account. He exchanged the digital coins for $2 million and used it to purchase Ferrari, jewelry, a million-dollar home, and other items.
Earlier this year, T.I. was dismissed by a judge from a class-action lawsuit in relation to the FLiK ICO after he and Felton were accused of promoting unregistered security and dropping the token when it was priced at $0.21. Other people involved in the case were T.I.’s social media manager, William Sparks, Jr., film industry workers Chance White and Owen Smith who apparently promoted CoinSpark without disclosing they were paid to promote the company.
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However, the SEC said in a statement that the rapper made an arrangement for the FL’iK ICO ” to be promoted on the Twitter, Instagram, and Facebook accounts of a well-known American actor, comedian, and producer (‘Celebrity 1’), who, at the time of the FLiK ICO, had more than 34 million followers on Twitter.”
“The announcement of the FLiK ICO on Celebrity 1’s social media accounts also substantially amplified the reach of FLiK’s marketing campaign for the FLiK ICO.”
T.I. has agreed to pay $75,000 in penalty charges and to stay away from digital coin and asset promotions for five years. The other men involved will pay $25,000 each and will be banned from promoting digital assets for sales for the next five years. As for Felton, he is facing criminal charges.