The SEC states that “Given the explosion of ICOs over the last year,” it has sought to pursue “cases that deliver broad messages and have market impact beyond their own four corners.” In 2018, the SEC “brought 20 standalone cases, including those cases involving ICOs and digital assets.”
The SEC notes that while many of said cases “have involved allegations of fraud,” the Division of Enforcement also has also taken action “to ensure compliance with the registration requirements of the federal securities laws.” In the past year, the SEC has opened “dozens” of investigations involving ICOs and cryptocurrency, many of which are ongoing as of this writing.
The report adds that the joint statement published by the SEC Division of Enforcement and the SEC Office of Compliance Inspections and Examinations urging caution with regard to the celebrity promotion of ICOs “brought an almost immediate end to such promotions.”
One Alpha’s research was informed by surveying 140 active companies from Israel’s distributed ledger technology section. The report estimates that said companies have generated a combined $1.3 billion in investments since 2017, of which “More than … 88% of the funds are ICO-related.”
The chief executive officer of One Alpha, Yaniv Feldman, highlighted that “Israelis are less than 0.1 percent of [the] global population while making 3 to 5 percent of [the] global ICO fundraising” total.
The plaintiffs assert that T.I. and 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.” The investors also allege that Felton “created fake online posts on behalf of Mark Cuban in order to manipulate the value of Flik Tokens,” and that the pair fraudulently announced that Kevin Hart was going to become the face of the company.
The group accuses T.I. and Felton of then dumping on the markets, and are seeking $5 million in damages for securities fraud.