The Securities and Exchange Commission (SEC) has obtained a final judgment against defendants Ryan Felton, FLiK, and CoinSpark, whom the SEC had previously charged for their involvement in two fraudulent initial coin offerings (ICOs).
The SEC’s complaint was filed on September 10, 2020, in federal district court in Atlanta, Georgia. The complaint alleged that Felton promised to build a digital streaming platform for FLiK, and a digital asset trading platform for CoinSpark. Instead, Felton allegedly misappropriated the funds raised in the ICOs.
The complaint also alleged that Felton secretly transferred FLiK tokens to himself and sold them into the market, reaping an additional $2.2 million in profits, and that he engaged in manipulative trading to inflate the price of SPARK tokens. Felton allegedly used the funds he misappropriated and the proceeds of his manipulative trading to buy a Ferrari, a million-dollar home, diamond jewelry, and other luxury goods.
Felton, FLiK, and CoinSpark consented to the entry of a final judgment permanently enjoining them from violations of Sections 5(a) and (c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder; permanently enjoining Felton from violations of Section 9(a)(1) of the Exchange Act; permanently enjoining Felton, FLiK, and CoinSpark from participating, directly or indirectly, in the issuance, purchase, offer, or sale of any digital asset security; permanently barring Felton from acting as an officer or director of a public company; and ordering joint and several disgorgement in the amount of $2.8 million, plus prejudgment interest in the amount of $704,981, to be deemed satisfied by the criminal judgment and restitution and forfeiture orders entered against Felton by the United States District Court in United States v. Felton, Case No. 20-CR-347 (N.D. Ga.).
