ATLANTA - Rapper and actor T.I. has settled civil charges with the U.S. Securities and Exchange Commission that he helped promote a fraudulent cryptocurrency.
T.I., whose real name is Clifford Harris, agreed to a civil settlement with the SEC that was announced Friday. He is paying a $75,000 fine and agreeing not to sell or market similar securities for at least five years.
Harris got into trouble, the SEC said, because he used his social media accounts to promote FLiK, falsely claiming to be a co-owner, and asked an unnamed actor and comedian to also promote FLiK, providing language calling it T.I.’s “new venture.” The SEC says both of those moves broke federal laws against selling securities without registering with the SEC.
The charges against Harris were part of a larger enforcement action against others including film producer Ryan Felton, who faces wire fraud and other charges in a 28-count indictment unsealed Wednesday.
Felton and William Sparks, T.I.’s social media manager, also sought to trade on his name to sell and promote the cryptocurrencies, federal authorities said.
Federal officials allege Felton took in more than $3 million from investors in two cryptocurrencies — FLiK and CoinSpark — in 2017 and 2018.
“Despite promising to use the funds raised from investors to build the FLiK and CoinSpark online platforms, Felton instead used the funds to buy a Ferrari, a million-dollar home, diamond jewelry, and other luxury items for himself,” the SEC civil complaint states.
A spokesperson for T.I. emailed a statement late Monday that the rapper regretted his involvement with Felton. It said T.I. had attempted to help a local entrepreneur who presented an innovative idea for a streaming online platform to help new creators of music and video content.
“Regrettably, Mr. Felton apparently never built the platform he promised T.I. and many others, and instead sought to profit from Mr. Harris’s popularity and reputation. Mr. Harris never took a dollar from Mr. Felton’s failed venture and immediately removed his name from it once he learned that the project was undeveloped,” the statement said.
It added the rapper responded to all SEC inquiries and will continue to look for new ways to help new artists gain access to digital distribution.
Lawyers for Felton did not immediately respond to emails seeking comment Monday.
Officials say Felton paid cash for a $1.5 million house, $180,000 for a 2007 red Ferrari 599 GTB Firoana, plus tens of thousands of dollars in jewelry. The government wants Felton to forfeit his gains.
Prosecutors say Felton had claimed that all the money would go to expand the businesses, used fake names to build excitement in CoinSpark, and then sold thousands of coins to take advantage of inflated prices based on his misrepresentations.
Also charged in the civil proceeding were Owen Smith and Chance White, who both work in the film industry in Atlanta. They, like T.I. and Sparks, agreed to settle the civil charges.
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