A group of celebrities and artists arrested for fraud using initial sales of crypto projects (ICO)
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Answer A group of celebrities and artists arrested for fraud using initial sales of crypto projects (ICO)
stopped The US Securities and Exchange Commission (SEC) has accused eight Atlanta-based artists for making millions from fraudulent cryptocurrency schemes.
Rapper Joseph Harris Jr., film producer Ryan Felton and six others have been indicted by the US Securities and Exchange Commission (SEC) for embezzlement through two initial cryptocurrency offerings.
The IPOs are related to the “Shilling FLiK” project and “Coinspark”.
The Securities Commission accused Felton of selling unregistered securities of FliK and Coinspark.
Felton promised investors to build a digital platform for cryptocurrency exchange.
Instead, he used the money he raised to buy a Ferrari, a multimillion-dollar house, flashy jewelry, and other luxuries, all with the investors’ money.Read:Cardano records a 50-fold increase in the number of large transactions in 2022
The “FLiK” project raised more than $160,000 in Ethereum in September 2018 in the form of an ICO, while the CoinSpark project raised more than $280,000 in 2018, according to the SEC.
Regardless of this money, Felton manipulated the FLiK coins and the price of the SPARK token to earn another $2.2 million.
Rapper “T” is accused of selling “FLiK” coins as his new venture, falsely claiming that he was one of the founders of the project.
ICOs related to FLiK and Coinspark:
Other individuals implicated in the aforementioned scams are Chance White and Owen Smith who failed to disclose their interests in promoting Coinspark’s SPARK coin.
Charges against eight individuals and two companies have been filed in the US District Court for the Northern District of Georgia.
The accusations come after the SEC sanctioned DJ Khaled and boxing champion Floyd Mayweather for promoting unregistered cryptocurrency securities in December 2018.
Caroline M. Welchance, associate director of enforcement at SEC, said of the action:
Federal securities laws offer the same protections to investors in digital currencies as they do to investors in traditional forms of securities.Read:New report says 75% of EOS transactions in DApps are ‘fake’
The complaint seeks punitive action against Felton including injunctive relief, revocation of wrongful gain, a range of financial penalties and a ban from joining any public company.
Meanwhile, T will face fines of $75,000 and a binding promise to prevent him from selling any digital currency or digital securities for five years.
The other defendants complicit in the fraud scheme agreed to pay a fine of $25,000, along with the restitution of their ill-gotten gains and a similar five-year restriction.
How can cryptocurrency users avoid fraud in the crypto market?
Two fraudulent crypto projects disappear after being listed on Uniswap
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