Federal grand jury indicts film producer Ryan Felton for cryptocurrency fraud
Felton promoted ICOs for two new entities—FLiK and CoinSpark.
Ryan Felton has been indicted by a federal grand jury on charges arising out of two different cryptocurrency-based investment schemes, the United States Attorney’s Office for the Northern District of Georgia announced on Friday.
The indictment and other information presented in court reveal that in 2017 and 2018, Felton promoted initial coin offerings (ICO) for two new entities—FLiK and CoinSpark.
Felton marketed FLiK as an entertainment streaming platform, and he founded CoinSpark as a new cryptocurrency trading exchange. In order to increase, or pump, the price of the coins, Felton made numerous false representations and material omissions before, during and after the ICOs. For example, he claimed that all investor funds would go towards the development, launch, and support of the platforms and that private investors made significant investments in the entities.
Felton also posed as a potential investor, using fake names, on various internet forums and social media sites in order to further promote false information and build up excitement in CoinSpark. After the ICOs ended, Felton secretly sold thousands of coins on secondary cryptocurrency markets to take advantage of the artificially inflated coin prices based on his misrepresentations and eventually transferred the vast majority of investor funds into his personal financial accounts.
Felton used the vast majority of the investor proceeds to fund his extravagant lifestyle, including an all-cash purchase of a $1.5 million residence and an all-cash purchase of a $180,000 red 2007 Ferrari 599 GTB Fioran Coupe. The government is seeking to forfeit the proceeds of his schemes and previously filed a civil forfeiture action, which is stayed pending the resolution of the criminal prosecution.