Rapper Clifford Harris Jr., who performs under the name T.I., has settled charges with the United States Securities and Exchange Commission (SEC) related to his promotion of an initial coin offering (ICO). The US SEC detailed two fraudulent initial coin offerings on Friday — one for a digital streaming service FLiK and another for a trading platform called CoinSpark, with Atlanta-based film producer Ryan Felton presumably raised funds.
Felton allegedly misappropriated the funds raised in the ICOs.
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. “The complaint also alleges that Felton secretly transferred FLiK tokens to himself and sold them into the market, reaping an additional $2.2 million in profits and that he engaged in manipulative trading to inflate the price of SPARK tokens,” the US SEC said. “Felton allegedly used the funds he misappropriated and the proceeds of his manipulative trading to buy a Ferrari, a million-dollar home, diamond jewelry, and other luxury goods.”
Three other individuals were also charged in the case.
According to the SEC, rapper T.I. promoted the FLiK on his social media channels during the sale for that token. Three other individuals — William Sparks, Jr., T.I.’s social media manager, and Owen Smith and Chance White — were also charged, and all three of them reached settlements with the SEC. According to the SEC statement, T.I. will pay a $75,000 civil penalty and has agreed “not participate in offerings or sales of digital-asset securities for at least five years. All of the settlements described by the US SEC are subject to the court’s approval. Felton has been charged by the SEC with “violating registration, antifraud, and anti-manipulation provisions of the federal securities laws.