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American Rapper T.I. In Troubled Waters For Endorsing Fraudulent ICO

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Initial Coin Offerings [ICO] captured the attention of the entire crypto-verse a few years ago. However, it has also paved the way for several fraudulent platforms to enter the industry. While some say that the ICO bubble burst, the scams linked to it have been prolonged. More recently, a prominent actor along with a few others from Atlanta came under the purview of the United States Securities and Exchange Commission [SEC] for endorsing fraudulent ICOs.

T.I. To Pay $75K As Penalty

In a recent press release, the SEC highlighted that prominent actor and rapper, Clifford Harris, more popularly known as T.I. or Tip was charged for promoting Ryan Felton’s fraudulent unregistered ICOs. Apart from Tip and Felton, three others were also charged of being involved in the deceitful project. Felton’s projects included a digital streaming platform, FLiK, and a crypto exchange, CoinSpark.

The SEC accused Tip of endorsing FLiK via social media by selling FLiK tokens while urging people to invest in the fraudulent ICO. The rapper did so by claiming to be the co-owner of FLiK. This was reportedly carried out by the rapper’s social media manager, William Sparks, Jr.

As a penalty, the SEC required T.I. steer clear of any crypto securities offerings or sales for the next five years along with a civil monetary penalty of $75,000. Even though a lawsuit alleged that prominent comedian, Kevin Hart was part of the scammy ICO, the SEC did not press charges.

The other two involved in the case, Chance White and Owen Smith were charged for endorsing SPARK tokens “without disclosing they were promised compensation in return.” Both Smith and White were required to pay a total of $25,000 each. The individuals were also refrained from engaging in activities pertaining to digital assets like issuance, offering, purchase, or sale.

Elaborating on the amenities for investors, Associate Director in the Division of Enforcement, Carolyn M. Welshhans said,

“The federal securities laws provide the same protections to investors in digital asset securities as they do to investors in more traditional forms of securities

While Felton promised his investors that he would roll out FLiK as well as CoinSpark and raised funds via the ICO, he instead garnered a whopping $2.2 million as profits by selling FLiK tokens in the market. Felton reportedly transferred the tokens to himself before selling them off and even attempted to inflate the price of SPARK tokens by manipulative trading. The SEC further alleged that Felton purchased luxury goods including diamond jewelry, a million-dollar house, and a Ferrari with the acquired funds.

Welshhans further added,

“As alleged in the SEC’s complaint, Felton victimized investors through material misrepresentations, misappropriation of their funds, and manipulative trading.”

Three PlexCoin ICO Scammers Face Allegations Over $8Million Fraud

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According to recent reports, three Canadians face charges of allegedly swindling investors of $8 million for the 2017 PlexCoin ICO scam.

Conspiracy to Commit Wire Fraud and Securities Fraud

The three individuals, Dominic Lacroix, Sabrina Paradis-Royer and Yan Oullet, face five counts, including money laundering conspiracy and wire fraud conspiracy; securities fraud and wire fraud charges.

Investigators believe that the scammers have taken part in the transfer of millions of investment funds swindled from them through the Initial Coin Offering (ICO) dubbed PlexCoin.

According to the legal team behind the investigation and the case, the three individuals used the funds; for their daily living expenses and the renovation of their homes. In addition, the indictment continues to argue that the three have misinterpreted PlexCoin to investors through a number of websites and social media campaigns.

Misrepresentation of  PlexCoin Management

Oullet, Paradis-Royer and Lacroix made false presentations on behalf of the management of PlexCoin and stated that the management of the company consisted of a team of professionals based in Singapore. The three promised investors a return of 1,354 percent within 30 days of investing their money in the ICO. The ICO raised $8,269,218 for the alleged PlexCoin firm.

This is the most recent ICO fraud charge. Meanwhile, the United States Securities and Exchanges Commission has frozen Paradis-Royer and PlexCorps with an emergency asset freeze back in 2017. This was part of a legal indictment that accused the firm of going against security legislation. The Exchange Commission renewed the freeze in 2018 and described Dominic Lacroix as a “recidivist Quebec securities violator”

Meanwhile, the Chainanalysis report indicates that scammers and thieves hold approximately 300,000 bitcoins. The report went on to state that cryptocurrency exchanges were the final destination for illegal crypto.