Rapper T.I. and businessman Ryan Felton have recently found themselves on the end of a lawsuit concerning a large-scale cryptocurrency scam that allegedly swindled investors out of $2 million.
According to Complex, the duo announced a FLiK Token back in August 2017 with a range of promises. Felton allegedly claimed tokes could be purchased at six cents each, but would be worth $14.99 within 15 months.
The lawsuit alleges the rapper and businessman engaged in a “pump and dump” scheme to drive up the token price from six to 21 cents. But the price later crashed after tokens were dumped. Currently, one FLiK token is worth $0.0009.
Those who invested into the project were allegedly told by Felton the stark price drop could be attributed to T.I.’s family and friends, who sold gifted tokens “…on coinexchange.com causing rapid devaluation.”
The lawsuit also claims Felton crafted a new company and said it bought FLiL, while denying that he had anything to do with it. Investors are now seeking at least $5 million in damages and are accusing T.I. and Felton of securities fraud. They say more than $2 million was lost.
The suit also alleges the two fraudulently gave the appearance that Kevin Hart was going to be the face of the token. According to TMZ, Hart is not being sued.
Celebrities And Crypto
Controversy surrounding celebrity involvement in the cryptocurrency world isn’t new. CryptoGlobe recently reported on another case, where famous boxer Floyd Mayweather and music producer DJ Khaled are allegedly being sued for involvement in the Centra Tech cryptocurrency scam.
Both Mayweather and Khaled have been named in a lawsuit for purportedly being celebrity endorsers of Centra Tech, as they promoted it across various social media platforms.
However, it is not immediately clear if the two have been recently indicted due to the existence of new information, or were associated with a previous class action lawsuit filed in June. The report from TMZ says investors in Centra Tech are looking to get their money back, along with damages, from the company and the two celebrities.