SEC Triumphs Over Crypto YouTuber Ian Balina in Unregistered ICO Case

A federal judge has ruled against Ian Balina, finding that he violated securities laws by promoting and selling unregistered Sparkster (SPRK) tokens to U.S. investors.

In a significant legal victory for the U.S. Securities and Exchange Commission (SEC), a Texas federal court judge has ruled that crypto YouTuber Ian Balina violated securities laws by participating in an unregistered initial coin offering (ICO) of Sparkster (SPRK) tokens. The court determined that Balina’s actions involved the sale of unregistered securities, impacting U.S. investors.

On May 22, Judge David Alan Ezra issued an order stating, “The Court has determined, as a matter of law, that U.S. securities laws are applicable to Balina’s actions and that SPRK tokens qualify as securities.” This ruling grants a partial victory to the SEC, which had filed a lawsuit against Balina in 2022.

Online advertising service 1lx.online

The court concluded that the SPRK tokens constituted an investment contract under the Howey test, wherein investors pool money into a common enterprise with the expectation of profits driven by the efforts of others. The judge concurred with the SEC’s stance that Balina “purposefully targeted United States investors” and rejected his summary judgment claim that the SEC lacked jurisdiction because the sales occurred overseas.

However, the SEC did not succeed in all its claims. The court found inconsistencies in the SEC’s assertion that Balina failed to disclose a compensation agreement with Sparkster CEO Sajjad Daya.

According to the SEC’s lawsuit, Balina purchased $5 million worth of SPRK tokens between May and July 2018. He then promoted these tokens across various social media platforms and created a Telegram group to form an investment pool. The SEC alleged that Balina did not disclose a 30% bonus he received for purchasing the tokens, which he claimed was merely a standard volume discount in a private presale deal.

Sparkster, a blockchain application development platform, conducted its SPRK token ICO from April to July 2018, marketing itself as a “low-code” solution for developers. In September 2022, Sparkster settled with the SEC, agreeing to destroy its remaining SPRK tokens and delist them from trading platforms without admitting or denying the regulator’s claims. The SEC also mandated Sparkster to pay $30 million in disgorgement, $4.6 million in interest, and a $500,000 civil penalty.

Balina has not yet responded to requests for comment on the ruling.

Our creator. creates amazing NFT collections! 
Support the editors - Bitcoin_Man (ETH) / Bitcoin_Man (TON)
Pi Network (Guide)is a new digital currency developed by Stanford PhDs with over 55 million participants worldwide. To get your Pi, follow this link https://minepi.com/Tsybko and use my username (Tsybko) as the invite code.
Binance: Use this link to sign up and get $100 free and 10% off your first months Binance Futures fees (Terms and Conditions).
Bitget: Use this link Use the Rewards Center and win up to 5027 USDT!(Review)
Bybit: Use this link (all possible discounts on commissions and bonuses up to $30,030 included) If you register through the application, then at the time of registration simply enter in the reference: WB8XZ4 - (manual)

Online advertising service 1lx.online

Comments

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept