The US Securities and Exchange Commission (SEC) has accused two cryptocurrency startups and eight people, including the rapper TI, of violating securities law in conducting and promoting ICOs.
The SEC said that film producer Ryan Felton had misappropriated funds and carried out fictitious cryptocurrency trading using proceeds from two ICOs: FLiK and CoinSpark. In addition, rapper Clifford Joseph Harris aka TI, Owen Smith, Chance White and William Spark are accused of violating the securities law for recommending investors buy tokens without telling them that they were paid to promote projects.
Seven people, including rapper TI, settled claims related to the conduct and promotion of the ICO, as well as violations of securities laws. In a separate statement, the SEC said that as part of the ICO, FLiK raised about 539 ETH at the end of September 2018, while CoinSpark raised about 460 ETH. Felton has been charged with fraud and manipulation, according to the SEC.
Rapper TI “offered and sold FLiK tokens”, pretending to be a co-owner of the business and encouraging his fans to invest in the project. He agreed to pay a $ 75,000 fine and not participate in the sale of digital assets for at least five years. TI’s social media manager, William Spark, agreed to pay a $ 25,000 fine and also refrain from participating in any sale of securities for five years.
This is not the first time the SEC has indicted celebrities for illegal ICO promotion. Recall that in 2018, boxer Floyd Mayweather and popular producer DJ Khaled became defendants in a lawsuit filed by defrauded investors against the Centra Tech cryptocurrency project. The SEC then fined Mayweather and DJ Khaled for advertising a fraudulent ICO.