Cryptocurrency News

SEC Fines Clifford ‘T.I’ Harris Jr. Over ICO Tokens Fraud.

Grammy award-winning artist Clifford “T.I” Harris Jr. has had a checkered past with financial regulators over cryptocurrency tokens. In what could signal a possible legal headache for him, the SEC confirmed that two of his associates would pay fines within a recently-opened case.

In line with the court records with the U.S. District Court for the Northern District of Georgia, the SEC has imposed a $102, 992 USD penalty on three of the rapper’s affiliates. The men, named Owen Smith, Chance White, and William Sparks Jr., reportedly had prominent roles in selling FLiK tokens in an ICO that the SEC has now identified as illicit.

The payment will cover civil penalties, fees, and disgorgements as the parties appear to possess landed an affect the SEC to finish the case.

Harris appears to still get on the hook, however. The case was initially revealed earlier in September, with the financial watchdog accusing the rapper of promoting the FLiK tokens. Alongside Harris and therefore the three aforementioned men, Atlanta-based filmmaker Ryan Felton was also mentioned within the case.

The FLiK case isn’t new. The fraudulent ICO was travel by a streaming platform bearing a similar name. Earlier in Nov 2018, investors filed a class action claiming to possess lost $1.3 Mln to the project.

The SEC highlighted that Felton had used the ICO to boost money for FLiK as well as Coin Spark, a digital asset trading platform. Then, he transferred the tokens into his personal account and exchanged them for a sum of $2 Mln. He eventually purchased several luxury items, including jewelry, a million-dollar mansion, as well as a Ferrari.

Sparks, who works as Harris’ social media manager, also illicitly promoted the trading platform alongside White and Smith. The three men allegedly did not disclose any financial benefits that the firm paid them for promotional purposes.

The SEC eventually charged Sparks with violating registration provisions by selling FLiK tokens on Harris’ social media pages. The agency also charged Smith and White with violating anti-touting and registration provisions for failing to disclose their financial gains from promoting CoinSpark.

The class action also roped in identified actor and comedian Kevin Hart. Plaintiffs alleged that they had made investments in parts of social media endorsements from Hart and Harris. However, Law360 revealed earlier in March that Northern Georgia District Court cleared the rapper of all charges.

District Court Judge Charles Pannell confirmed that Harris had promoted the project. However, the rapper also reportedly didn’t make any material representations of the tokens. Additionally, the judge highlighted that none of the investors was from Georgia. So, the rapper was beyond the Georgia Uniform Securities Act.

Since the firm promoting the ICO itself wasn’t Georgia-based, the securities fraud against Harris didn’t have any solid backing. The SEC’s case against Felton is ongoing. As for Harris, he already paid a $75,00 fine and agreed to desist from participating in any digital asset securities offerings or sales for the subsequent 5-years.

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