Rapper TI accused by SEC of cryptocurrency scam

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Rapper TI has been tasked by the Securities and Exchange Commission with promoting a fraudulent cryptocurrency offer.

The regulator said in its complaint that TI – real name Clifford Joseph Harris – sold cryptocurrency tokens using its Twitter account and encouraged its followers to invest in the initial FLiK 2017 coin offering. He also falsely claimed to be a co-owner, the agency said.

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The SEC said the offer was a scam led by film producer Ryan Felton and, according to Mashable, Felton had promised to build “Netflix on the blockchain” but was never delivered.

TI gives a surprise performance during the “No Place Like Home” tour at Coca-Cola Roxy on January 19, 2020, in Atlanta. (Photo by Paras Griffin / Getty Images)

Instead, Felton used investor money to jack up the price of a second token, SPARK, which he also controlled, the SEC said. The proceeds of the scheme were used to buy Felton a Ferrari, diamond jewelry, a house and unspecified “luxury goods,” the agency said in its lawsuit filed in federal court in Atlanta.

“FLiK’s promotional material further promised that FLiK tokens would be redeemable on the FLiK platform for increasing amounts in the first year, each FLiK redeemable for $ 3.99 after the first 3 months, $ 9.99 after 12 months and $ 14.99 after 15 months, ”the SEC explained. “No FLiK platform has ever existed. ”

According to the SEC, the initial FLiK coin offering raised approximately 539 ether, valued at approximately $ 164,665 on September 20, 2017.

“TI also asked a famous friend to promote the FLiK ICO on social media and provided the language for the posts,” the agency noted, “referring to FLiK as TI’s ‘new company’. ”

Without admitting to any wrongdoing, Harris agreed to pay $ 75,000 in a settlement. The 39-year-old will also be absent from sales of similar digital asset securities over the next five years.

TI isn’t the only celebrity facing regulatory action on cryptocurrency.

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In February, actor Steven Seagal agreed to pay $ 334,000 to settle claims by the SEC that he had not disclosed he was paid to promote a coin offering; Boxer Floyd Mayweather and music producer DJ Khaled agreed to deals in 2018.

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