The US Securities and Exchange Commission has charged Atlanta-based rapper Clifford Harris, Jr., better known as T.I., and four others for promoting an unregistered and fraudulent initial coin offerings (ICO).
T.I. promoted FLiK tokens in 2017 to his social media followers, falsely stating that he was a co-owner of the project boasted as “Netflix on the blockchain.” The platform was advertised as a streaming media platform with products that can be purchased with digital tokens, the SEC said in a statement on Friday.
The 39-year old rapper has agreed to pay the penalty of $75,000.
As per SEC’s order, he is not allowed to participate in offerings or sales of digital-asset securities for at least five years.
The company’s founder, a film producer, named Ryan Felton, who started FLiK and CoinSpark, is meanwhile facing claims that he misappropriated the raised funds to buy Ferrari, a million-dollar home, and other luxury goods.
“Felton victimized investors through material misrepresentations, misappropriation of their funds, and manipulative trading,” said Carolyn M. Welshhans, Associate Director in the Division of Enforcement.
The complaint alleges that Felton secretly transferred FLiK tokens to himself and gained an additional $2.2 million in profits by selling them into the market.
Previously, boxer Floyd Mayweather and music producer DJ Khaled have also been sued by the regulators for hyping the ICOs.