SEC charges rapper T.I. over cryptocurrency scam

It would seem T.I. left a paper trail. 

The Securities and Exchange Commission (SEC) on Friday announced charges against the 39-year-old rapper, real name Clifford Joseph Harris, for his alleged role in promoting a fraudulent initial coin offering. Harris, the SEC claims, sold cryptocurrency tokens via his Twitter account and encouraged his followers to invest in the 2017 FLiK ICO — all the while falsely claiming to be a part owner. 

According to the SEC, the ICO was (surprise!) essentially a scam run by film producer Ryan Felton. Felton promised to build “Netflix on the blockchain” (LOL), but never delivered. Instead, Felton allegedly used money from FLiK ICO investors to drive up the price of a second token, SPARK, which Felton also controlled. 

The SEC notes that Felton is accused of using proceeds from the endeavor to buy a Ferrari, diamond jewelry, a home, and unspecified “luxury goods.”

“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,” explains the SEC. “No FLiK platform ever existed.”

Importantly, the SEC claims that T.I. was an extremely active participant in the fraud — roping in others to help him promote it.

“T.I. also asked a celebrity friend to promote the FLiK ICO on social media and provided the language for posts,” reads the SEC announcement, “referring to FLiK as T.I.’s  ‘new venture.'”

According to the SEC, the FLiK ICO raised approximately 539 ether, which was worth around $164,665 at the time of September 20, 2017. 

Notably, without admitting that he did anything wrong, Harris has already agreed to pay a fine of $75.000, as well as to sit out similar digital asset securities sales for the next five years. 

SEE ALSO: Not above the law: Steven Seagal’s shady crypto past under siege by SEC

In agreeing to pay the fine, Harris clearly hopes his cryptocurrency-related troubles are dead and gone. He would not be the first celebrity to make that calculation. In February of this year, Steven Seagal found himself on deadly ground, deciding to pay $314,000 in fines to the SEC after being accused of failing to disclose he was paid to promote an ICO. In 2018, Floyd Mayweather and music producer DJ Khaled were hit with similar fines. 

It’s almost like celebrities dolling out cryptocurrency investment advice might have something to gain from it, financially — or maybe that’s just an urban legend.