Rapper T.I. has been cleared of wrongdoing over the failed FLiK ICO after a judge ruled that he was not personally responsible for its collapse. T.I., real name Clifford Harris Jr., had been sued by disgruntled ICO investors in November 2018 following the failure of the platform, citing a cumulative $2 million loss, but District Judge Charles Pannel dismissed the allegations, stating that the defense’s case didn’t reach the necessary burden of proof and the defense could not prove that the offenses took place within Georgia where the case was lodged.
Harris was active behind the scenes of FLiK, a supposed decentralized entertainment platform, which held its ICO in mid-2017. After spending a collective $2 million tokens at ICO, the 25 plaintiffs allege that the team, including Harris, orchestrated a classic ‘pump and dump’, artificially raising the token price by 400% in mid-2017 with ‘announcements’ and social media hype before selling their stash and abandoning the project.
Harris Scores Two Victories in One Case
Harris managed to get the case thrown out in May 2019 based on the plaintiffs’ claim being made outside of the statute of limitations on securities cases, although the judge at the time gave the defense a chance to refile later in the year, which they did, ruling they had strong enough grounds to continue.
Harris had also claimed that the token sale did not constitute a sale of securities as the tokens were intended to be utilized on the platform. While the judge in the 2018 case had intimated that the ICO fail the Howey test on securities, Judge Pannel disagreed, saying that Harris never made any claims as to the potential future value of the FLiK token and so they could not be considered a security.
Celebrity Endorsements – a Passing Fad?
Celebrity endorsements of cryptocurrency ICOs has rarely ended well, with a whole host of individuals either unwittingly promoting scams or promoting ICOs without declaring an interest. Boxer Floyd Mayweather, musician DJ Khaled, and actor Steven Seagal are among a host of famous names who have been found guilty of illegally promoting ICOs, but with the downturn in the crypto markets and the end of the ICO boom it seems that, for now at least, we can say a thankful goodbye to celebrity-backed ICOs.