- The charges made by SEC were for promoting a fraudulent ICO of a cryptocurrency token.
- Felton claimed to build a digital asset trading platform for Flix tokens and a digital trading platform.
- As per SEC, producer Felton used the ICO money for personal expenses such as a Ferrari car, multi-million-dollar home and other expensive merchandise.
On Friday, the US Securities and Exchange Commission (SEC) in a statement said that they have charged five Atlanta-based individuals which includes Clifford Harris Jr. also known as T.I. or Tip and famous film producer Ryan Felton. The charges made by SEC were for promoting a fraudulent ICO of a cryptocurrency token.
Felton claimed to build a digital asset trading platform for Flix tokens and a digital trading platform. He was charged to mislead the fund raised from the ICO. Flix tokens at the time of their launch were promoted as the “Netflix of the blockchain”. These tokens allowed users to buy and sell products over a streaming platform. They were prompted as an investment token for the blockchain platform. As per SEC, producer Felton used the ICO money for personal expenses such as a Ferrari car, multi-million-dollar home and other expensive merchandise. He secretly transferred his share of Flix tokens and sold them for a whopping $2.2 million in profits.
Rapper Cliffors Harris Jr. Alleged by SEC
SEC alleged that in 2017, T.I. on his social media account promoted and sold Flix tokens and claimed to be the co-founder of the company. He urged his followers to invest in the tokens. SEC also alleged based on the language of the social media posts that T.I. even asked his celebrity friends to promote the Flix tokens. His social media account manager was also alleged by SEC along with two other Atlanta based individuals namely Chance White and Owen Smith who were promoting SPARK token.
Everyone Decided to Settle But Felton
Soon the SEC released another statement that four out of five people have decided to settle rather than continuing the investigation in the court of law. Rapper T.I. decided to settle by paying US regulators a fine of $75,000 and taking responsibility that he broke the laws by fraudulently promoting the Flix token and misleading his followers. Felton is the only defendant who hasn’t agreed for a settlement.
The other three defendants agreed to settle as well for $25,000 as a penalty and agreed for an injunction. They are also banned in any kind of participation in digital assets for five years. The charges against Felton are filled in the US district court of North Georgia. He was charged with violation of registration, anti fraudulent activities and federal security laws of anti-manipulation.