Official: Rapper T.I. admits to participating in ‘fraudulent’ cryptocurrency scheme

ATLANTA (CBS46)—Atlanta based rapper T.I. and four others have been charged in a fraudulent cryptocurrency operation.

According to the Securities and Exchange Commission, T.I. and three others have agreed to settlements to resolve the charges against them, however Atlanta film producer Ryan Felton, 46, has not agreed to settle the matter with the SEC.

In addition, Felton is facing federal criminal charges after an indictment by a federal grand jury, the U.S. Attorney’s office announced.

The SEC accused T.I., Felton, and three others of promoting unregistered and fraudulent initial coin offerings (ICOs), reportedly controlled by Felton.

Two companies allegedly controlled Felton, FLiK and CoinSpark, were also charged by the SEC, officials wrote.

SEC officials reported Felton raised money by promising to build a digital streaming platform for FLiK, and a digital-asset trading platform for CoinSpark.

However, Felton allegedly transferred FLiK tokens to himself and then reportedly sold them into the open market, reaping Felton an additional $2.2 million in profits, according to the SEC.

“[Felton] misled investors to believe their money would fund two innovative ventures, but instead, every penny went to support the suspects lavish personal life style,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “It is a sad reminder to investors to be very careful where they entrust their money, but also a reminder to anyone motivated by greed that the FBI and our federal partners are committed to holding them accountable for their actions.”

Additionally, SEC officials reported Felton allegedly “engaged in manipulative trading to inflate the price of SPARK tokens.

The U.S. Attonry’s office wrote, “Felton also posed as a potential investor, using fake names, on various internet forums and social media sites in order to further promote false information and build up excitement in CoinSpark.”

“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,” the SEC wrote.

The U.S. Attorney’s office reported Felton allegedly used investor’s money to buy a $1.5 million residence with cash and he allegedly purchased a $180,000 red 2007 Ferrari 599 GTB Fioran Coupe.

According to the SEC, T.I. acknowledged that he offered and sold FLiK tokens on his social media accounts and T.I. falsely claimed he co-owned FLiK.

Additionally, T.I. admitted to asking a celebrity friend to promote FLiK ICO on social media and T.I. provided the language for the posts, the SEC reported.

T.I.’s social media manager, William Sparks, Jr., and two other Atlanta residents, Chance White and Owen Smith, promoted SPARK tokens but they did not tell the public they were being paid to promote the coin, SEC officials wrote.

“As alleged in the SEC’s complaint, 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 SEC required T.I. to pay a $75,000 civil monetary penalty, and T.I. cannot participate in offerings or sales of digital-asset securities for at least five years.

White, and Smith each agreed to pay a penalty of $25,000 and to conduct-based injunctions prohibiting them from participating in the issuance, purchase, offer, or sale of any digital asset security for a period of five years, the SEC announced.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.