About 25 investors are filing a legal suit against T.I. citing that they were tricked to investing $1.3 million in a cryptocurrency backed by a rapper.
Ryan Felton announced the coming of FLiK Token with associated promises that were too good to be true.
Felton then in August 2017, stated that the value of one token will be 6 cents, and the investment will be worth $14.99 within a period of 15 months. This amounted to a 25,000% increase.
The suit alleged that T.I. and Felton used a “pump and dump” protocol to trick investors into buying FLiK Token. The money that was obtained from the investors was used to increase the price of their tokens. Allegedly, the value of the tokens went up from 6 to 21 cents. The value of the tokens changed when they ultimately dumped the tokens.
During August 2018, the tokens not even worth a penny each. When the investors question Felton about the price drop, the Blast reported that Felton related the price related to the activities of their family and friends. He stated that T.I. had given the FLiK tokens to family and friends who in turn sold these coins at coinexchange.com ultimately leading to rapid devaluation.
The allegation on Felton is that he has strategically created a new company to acquire FLiK Tokens and this, in turn, helped him get rid of the consequential blame about the decline in the value of the cryptocurrency.
The suit as well claims that T.I. and Felton managed to create a wrong impression by making it appear that Kevin Hart is the face of FLiK.
Felton further claimed, they ultimately got Dallas Mavericks, the owner of Mark Cuban as an investor. This further was used in order to manipulate the price of the cryptocurrency. The manipulation was done by making use of fake online posts on behalf of Mark Cuban.
The investors have now unfolded the trap, and they are accusing T.I. and Felton for securities fraud. The investors are seeking damages. They are not ready to settle down for anything less than $5 million in damages.
The lack of comprehensive regulations is the major cause for the legal uncertainty. There are increasing numbers of digital cases, and courts are having to deal with it. There are arbitration bodies being formed with relevant experts in different nations to deal with such frauds quickly.
So, countries and regulators are becoming alert about having to grant cryptocurrency with the special status. Legal experts are as well training themselves to understand this unregulated sector and the courts are continuing to struggle with crypto cases.
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