Rapper TI Sued for Crypto Pump-and-Dump SchemeNov 05, 2018 at 19:40
US Rapper T.I. now faces charges for securities fraud, particularly for allegedly employing the “pump and dump” scheme, one of the most common crypto scams.
According to news media outlet The Blast, TI created the FLiK Token with entrepreneur Ryan Felton in August of 2017.
Investors were promised of seeing their initial investments expand by as much as 25,000%.
However, a group of 25 investors who reportedly poured out $1.3 million in FLiK Tokens showed disappointment by elevating their concern to the courts, charging TI and his business partner for “at least $5 million”.
They described their investments as ”now worthless securities called FLiK Tokens”, alleging that Felton and T.I. boosted the price by buying the coin with the investments and then collectively selling them off.
The investors also accused Felton of putting up a new firm that supposedly purchased FLiK. The token co-founder reportedly denied involvement in the acquiring company.
US Actor Kevin Hart was also mentioned as an active social media promoter of the FLiK Token although no charges were filed against him.
— Kevin Hart (@KevinHart4real) September 16, 2017
Felton defended the platform supposedly also indicated that Dallas Mavericks owner and billionaire Mark Cuban was about to come onboard.
The FLiK token opened at a price of 6 cents apiece. In 15 months, it managed to hit a record high of $14.99 per token. However, it is reportedly trading at less than a single cent per piece.
Specifically, the charges filed against T.I. and Felton were for alleged violation on sections 12 and 15 of the Securities Act of 1933 and the Georgia Uniform Securities Act.
Alexander Loftus of Stoltmann Law Offices PC who serves as lawyer of the 25 investors, claimed that the lawsuit is just one of the many legal cases that he expects to pile up for similar anomalous fundraising activities.
“Thinly traded cryptocurrencies like this can be manipulated just like a penny stock so fraudsters can make a quick buck with a celebrity endorsement pumping the value up,” he explained.
Apart from Loftus, the investors are also represented by Robert Port of Gaslowitz Frankel LLC.
The case is also formally titled as Aurelien Beranger et al. v. Clifford “T.I.” Joseph Harris et al., in the US District Court for the Northern District of Georgia.
Since news broke about the charges filed for FLiK, both Hart and Cuban are yet to issue their official statements.