Rapper TI has been accused by the Securities and Exchange Commission of promoting fraudulent supply of cryptocurrency.
The regulator said in its complaint that TI – whose real name is Clifford Joseph Harris – sells cryptocurrency tokens using its Twitter account, and encourages its followers to invest in the initial offering of FLiK coins for 2017. He also falsely claims that he is a co-owner, the agency said.
IRS UPDATES CRYPTOCURATE TAX GUIDE
The SEC said the offer was a scam led by film producer Ryan Felton and, according to Mashable, Felton promised to build Netflix on a blockchain, but it was never delivered.
Instead, Felton is using investor money to raise the price of a second SPARK token, which he also controls, the SEC said. The proceeds from the scheme were used to buy Felton Ferrari, diamond jewelry, a home and unspecified “luxury goods,” according to the agency’s lawsuit filed in federal court in Atlanta.
“FLiK’s promotional materials further promised that FLiK tokens could be used on the FLiK platform to increase amounts in the first year, with each FLiK being able to redeem for $ 3.99 after the first 3 months, $ 9.99 after 12 months and $ 14.99 after 15 months, ”the SEC explained. “There has never been a FLiK platform.”
According to the SEC, the initial supply of FLiK coins collected approximately 539 ether, worth about $ 164,665 on September 20, 2017.
“TI also asked a celebrity friend to promote FLiK ICO on social media and provide the language for publications,” the agency said, referring to FLiK as “TI’s new endeavor.”
Without acknowledging any wrongdoing, Harris agreed to pay $ 75,000 under the agreement. The 39-year-old will also conduct similar sales of digital asset securities over the next five years.
TI is not the only celebrity to face regulatory action on cryptocurrency.
CLICK HERE TO READ MORE ABOUT FOX BUSINESS
In February, actor Stephen Siegel agreed to pay $ 334,000 to settle the SEC’s allegations that he had not revealed that he had been paid to promote the coin offering; boxer Floyd Mayweather and music producer DJ Khaled have agreed on agreements in 2018.