T.I. and his business partner allegedly engaged in a “pump and dump” scheme involving their cryptocurrency and now a group of pissed off investors is suing them for securities fraud.
According to court documents obtained by The Blast, a group of 25 investors claim they poured over $1.3 million “for now worthless securities called FLiK Tokens.”
The group claims the rapper and a guy named Ryan Felton used “social media, celebrity endorsements, and well-known industry experts to create the false impression that FLiK Tokens were a valuable liquid investment.”
In the lawsuit, the investors claim Felton and T.I. drove up the price of the tokens using the money they got from investors and then “dumped” their tokens and disappeared. They claim once they realized what went down, Felton created a new company that he said acquired FLiK “and speciously told investors that he had nothing to do with the new sham company.”
As part of their efforts to drive up the price, the investors claim T.I. and Felton made it seem like Kevin Hart was going to be the face of FLiK and even announced that FLiK was bringing Hart on “as owner of the business.”
In addition, the investors claim Felton had gotten Dallas Mavericks owner Mark Cuban to invest and even “created fake online posts on behalf of Mark Cuban in order to manipulate the value of FLiK Tokens.”
The investors claim in late 2017, a massive “dump” of FLiK tokens caused a massive drop in their value. They claim “Felton explained that the devaluation was caused, at least in part, because T.I. had given FLiK tokens to members of his family and friends who had sold massive amounts on coinexchange.com causing rapid devaluation.”
The investors are suing T.I. and Felton for securities fraud and seeking no less than $5,000,000 in damages.
The Blast reached out to a lawyer for T.I. for comment — so far, no word back.