The US Securities and Exchange Commission (SEC) fined Atlanta rapper Clifford Harris Jr. (also known as T.I) and others. SEC fined them for allegedly participating in two fraudulent Initial Coin Offering (ICO) projects.
T.I. Fined to a Sum of $125,000
According to a press release by the US Securities and Exchange Commission on Friday, September 11, 2020, T.I, along with businessman Ryan Felton and three other Atlanteans, participated in a pump and dump ICO scheme. Authorities cleared the rapper of all fraud allegations in March 2020.
Investors sued the rapper and Felton in 2018 on a failed ROI on their investments. The FLiK token created in 2017 started at 6 cents. The token claimed the price hoped to climb to nearly $15 within 15 months.
Additionally, T.I promoted the FLiK token on its social media account. Also, he encouraged many of his followers to invest in the token. Additionally, the Atlanta rapper falsely claimed to be a token holder. His social media manager Willam Sparks with Owen Smith and Chance White jointly promoted the FLik token.
However, when the value of the FLiK tokens fell, this confusion became apparent and resulted in investor losses. The court dismissed allegations of securities fraud and other charges against the rapper. However, SEC publications show that T.I will pay a $75,000 fine. In addition, T.I will “not participate in the issuance or sale of digital asset securities for at least five years”.
Celebrity Endorsement Does not Guarantee ICOs are Legal
There have been many cases in the past of celebrities participating in ICO promotion. Statistics have proven that some of these cases are hype. A popular case is the CentraTech fiasco involving former boxer Floyd Mayweather and record producer DJ Khaled.
In promoting the fraudulent CentraTech ICO, both celebrities had to pay fines, and interest totaling nearly $800,000. Furthermore, authorities banned DJ Khaled and Mayweather from promoting digital assets for two and three years, respectively.
The US Supreme Court has issued a ruling that will limit the illegal profits the SEC seeks in fraud cases.