Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
The fraud involved the promotion and selling of FLiK tokens, the native cryptocurrency of the FLiK platform that claimed to become the “Netflix of the blockchain”, however, it never saw the light of the day.
The United States Securities and Exchange Commission (SEC) has charged Clifford Harris Jr. aka Rapper T.I. for securities violations involving the promotion of an ICO, back in 2017, that later turned to be a fraud. The securities regulator accused Rapper T.I. of selling crypto tokens using his Twitter account.
The SEC said that Rapper T.I. encouraged his followers to invest in 2017 FLiK ICO while falsely claiming to be a part-owner. The FLiK ICO raised around 539 Ether (ETH) worth around $164,665 on September 20, 2017. Without making much noise Harris agreed to pay $75,000 as penalty charges to the SEC. Explaining the FLiK fraud, the SEC explained:
“FLiK’s promotional materials further promised that FLiK tokens would be redeemable on the FLiK platform for increasing amounts over the first year, with each FLiK redeemable for $3.99 after the first 3 months, $9.99 after 12 months, and $14.99 after 15 months. No FLiK platform ever existed. T.I. also asked a celebrity friend to promote the FLiK ICO on social media and provided the language for posts.”
Not Only T.I. Faces Charges with SEC
Along with Clifford Harris, the SEC has also charged film producer Ryan Felton and three other associates Owen Smith, Chance White and William Spark, Jr. All these people have been accused of cryptocurrency wash trading and misappropriated funds.
Apart from FLiK, the SEC mentions another crypto startup CoinSpark for who conducted an ICO promoted by these guys. FLiK made big promises to people claiming to become the “Netflix of the blockchain” wherein the users could buy the platform services using the FLiK tokens. But despite these big promises, Felton never delivered.
The SEC said that Felton instead used these funds for luxury like buying a Ferrari, diamond jewelry, a home, and other things. Cliffton Harris’ attorney Henry E. Mazurek said that the rapper regretted getting involved with Felton. Mazurek said that they have completely cooperated with the SEC investigation. But to avoid further trouble, the attorney has distanced and further involvement with Mr. Felton saying:
Rapper T.I. “never received a dollar from Mr. Felton’s failed venture and immediately removed his name from it once he learned that the project was undeveloped”.
On the other hand, Felton’s attorney Joshua Sabert Lowther. said that the SEC’s allegations were “grossly misplaced”. They would proceed with defending the producer at the trial.