Judge spits T.I. lyrics to dismiss ICO case, rapper’s lawyer approves
A US court has dismissed a complaint against rapper T.I (again) for promoting FLiK’s unregistered ICO in 2017 — by spitting back seven of the Grammy winner’s own song titles.
Disgruntled investor Kenneth Fedance sued T.I. (real name Clifford Harris Jr.) and business partner Ryan Felton in 2019 for allegedly hiding that FLiK tokens were really securities.
Fedance said the duo talked up FLiK tokens (issued by their entertainment company of the same name) and promised big returns.
But the price of FLiK crashed after T.I. and Felton dumped their stash — leaving Fedance $3,000 in the hole post-ICO.
Now, the US’ Eleventh circuit (which handles appeals) has upheld a lower court decision to dismiss the complaint, on the grounds it was filed outside the one-year statute of limitations for unregistered securities claims.
Fedance’s legal team hinged its case on “equitable tolling” in a bid to dodge that one-year expiry period. Equitable tolling states:
- Statutes don’t apply if plaintiffs were only aware of the injury caused after that period had ended.
- Fedance claimed he only knew FLiK was a security following a 2019 ruling.
- Judges found equitable tolling didn’t apply, as FLiK’s security classification wasn’t fraudulently concealed.
[Read more: SEC likely finds MetaKovan’s Beeple-backed crypto very ‘interesting’ — here’s why]
In dismissing Fedance’s lawsuit once and for all, the court weaved seven T.I. references through its final decision.
“Fedance asserted that he could not Bring Em Out earlier,” wrote chief judge William H. Pryor, referring to both the one-year statute and the rapper’s top 10 US single.
“You cannot make fraudulent concealment mean Whatever You Like,” squeezing in another popular T.I. track.
And so it went, with references to cuts like You Know What it Is transforming what was a dull legal document into a high-schooler’s Spotify playlist.
[Read more: Crypto investors out-settle SEC, snag $27.5M from Block.one over EOS]
T.I. win for the greater good
Fedance’s lawyer Alexander Loftus said he believed the decision was ultimately good for crypto investors.
Loftus disagreed that Fedance knew that FLiK was a security within the statute, “but at least this leaves the door open for other tardy registration claims which are prevalent with cryptocurrencies,” he noted (via Law360).
Indeed — despite the obvious pump and dump — the court ruled it obvious that FLiK buyers always knew they were acquiring a security (investment contract).
So, no misrepresentation of their investment had occurred at the hands of T.I. or Felton.
“These purchases were all About the Money,” wrote Pryor.
[Read more: Rapper T.I.’s securities suit could set precedent for crypto pump and dumps]
On the other side, T.I.’s legal team told Law360 they appreciated seeing the rapper’s songs quoted in the panel’s written opinion.