Rapper T.I. Sued For $5 Million Over Alleged Crypto Fraud

Clifford Joseph Harris Jr., better known as the rapper T.I., and his business partner Ryan Felton have been sued by some 25 cryptocurrency investors for $5 million for their alleged involvement in a “pump-and-dump” scheme.

The investors alleged that T.I. and Felton used “social media, celebrity endorsements, and well-known industry experts to create the false impression that FLiK tokens were a valuable liquid investment,” says a report in celebrity news website The Blast.

A Facebook post by FLiK in September, 2017, had said T.I. had joined the community as a "co-owner."

According to court documents obtained by The Blast, about 25 investors have claimed that they had invested over $1.3 million in FLiK token. The theflik.io webpage redirects to the Sky Block Media Group, a blockchain media distribution company, which is also shown on the official website on CoinMarketCap.

According to the report, the complainants said that the token was actively endorsed on social media by celebrities to create an impression it is “a valuable liquid investment.” The complainants also said T.I. and Felton deceived them by using the money raised to drive up FLiK token’s price, and when the prices fell, they dumped the token and "disappeared."

The report did not say where the complaint was filed, and International Business Times could not independently confirm the facts around the report. International Business Times has contacted the attorney for T.I. and this report will be updated if and when a response is received.

Felton — a self-proclaimed ‘doer of things’ according to his Twitter bio — created a new company that he said, as reported by the Blast, acquired FLiK “and speciously told investors that he had nothing to do with the new sham company.”The FLiK was launched in September, 2017, as tracked by CoinMarketCap. The token traded at its peak Oct. 17, 2017, when its price was $0.21. The prices fell and then went up again in February to about $0.18. It now trades at $0.001, and is ranked 1,584 on the CMC, based on its market cap of $42,550.

When launched it was actively promoted by U.S. actor Kevin Hart. The promotional campaign of the token also mentioned Mark Cuban — a billionaire and owner of the National Basketball Association's Dallas Mavericks.

The cryptocurrency space has seen a lot of celebrity association recently, with some even taking part in initial coin offerings (ICO) and blockchain-based startup projects.

Some of the familiar names include Ashton Kutcher who invested early-2018 in Ripple Labs, the blockchain platform, as well as in bitcoin payment service provider BitPay. Some other famous names investing in crypto space are actor Jamie Foxx, soccer star Lionel Messi, and former boxer Mike Tyson.

Not all celebrity interest in this space have had positive outcomes. Popular producer DJ Khaled and boxer Floyd Mayweather, according to celebrity news publication TMZ, were sued over their engagement as endorsers for a cryptocurrency project called Centra Tech, which turned out to be a scam. The project deceived investors and “made false claims about their product and about relationships they had with credible financial institutions," TMZ reported Oct. 10

Another U.S. rapper Ghostface Killah — a member of renowned Wu Tang Clan — co-founded an ICO that expected to raise up to $30 million. However, his Cream Capital was later stopped “with no plans to hold the token sale in the future.”Johnny Depp in October also forayed into the blockchain space with a collaboration with blockchain-based content sharing platform TaTaTu.