US rapper TI and his business partner Ryan Felton are being sued for $5 million by investors who claim a cryptocurrency established by the two is a scam, reports The Blast. The group of 25 investors say they poured over $1.3 million into FLiK Token, which was created in August 2017, and were promised that the crypto would jump from its opening price of 6 cents to $14,99 within 15 months, a nearly 25 000% increase.
The currency dramatically failed to live up to expectations and is now trading at less than 1 cent, after a massive “dump” of FLiK tokens caused the drop in their value, the investors claim. They add that Felton explained to them that the devaluation was at least partly caused by friends and family members of TI who sold massive amounts of FLiK tokens they had been given by the rapper, causing rapid devaluation.
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The group claims the two used used “social media, celebrity endorsements, and well-known industry experts to create the false impression that FLiK Tokens were a valuable liquid investment.” The endorsements came from the likes of celebrities Kevin Hart and Mark Cuban.
The lawsuit alleges that Felton and TI deliberately used investments to drive up the price of the tokens with the intention of “dumping” their tokens and disappearing. The investors claim that once they realised what had happened, Felton had created a new company which he said acquired FLiK “and speciously told investors that he had nothing to do with the new sham company.”
The investors are suing TI and Felton for securities fraud and seeking no less than $5 million in damages. The two business partners are yet to comment on the matter publicly.