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Crypto influencer Ian Balina charged for unregistered ICO in 2018

SEC charges Ian Balina for unregistered ICO four years ago

Image source: Forkast

The US Securities and Exchange Commision (SEC) alleged that crypto influencer Ian Balina violated regulations during Sparkester’s $30,000 ICO in 2018.

As a result, the SEC is charging Balina.

The charge

The SEC alleges that the crypto personality didn’t file a registration statement with the commission for his offering and sale of Sparkster’s SPRK tokens.

No exemption from the registration was applicable.

According to the SEC, Balina also allegedly failed to disclose the compensation he received while promoting the SPRK initial coin offering or ICOICO on social media.

Sparkster initially offered investors a portion of its “no code” software development platform with the purchase of SPRK tokens.

The tokens were claimed to allow users to develop software with minimal technical coding skills.

As a result, the SEC is seeking “injunctive relief, disgorgement, civil penalties, and other appropriate and necessary equitable relief.”

Should the charges hold, Balina will be unable to promote securities again.

Ethereum contribution

According to the filing, the contributions made in Ethereum to participate in the ICO took place in the United States.

The filing reads:

“[Users’] ETH contributions were validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country.”

“As a result, those transactions took place in the United States.”

Balina’s reaction

The crypto influencer reacted to the news by taking to Twitter, where he announced that he was excited to “take this fight public.”

“This frivolous SEC charge sets a bad precedent for the entire crypto industry,” he tweeted.

“If investing in a private sale with a discount is a crime, the entire crypto BV space is in trouble.”

“Turned down settlement so they have to prove themselves.”

ICO promotion

Balina gave the Sparkster token a 90% “Hall of Fame” ranking on his ICO investing spreadsheet.

According to the SEC’s filing, he also promoted it to users of a private Telegram group that had around 50 people.

The Cayman islands-incorporated firm is now defunct.

The SPRK ICO, which the SEC confirmed was unregistered, occurred between April and July 2018.

It raised approximately $30 million from nearly 4,000 investors in the United States and abroad.

Balina allegedly signed a contract that stated he would invest $5 million in the Sparkster offering prior to promoting the tokens on YouTube, Telegram, and social media platforms.

While the SEC claimed he agreed to a 30% bonus from Sparkster on the tokens he purchased in the offering, Balina allegedly never disclosed his consideration for his promotion.

The SEC

Today, the SEC announced that Sparkster and CEO Sajjad Daya agreed to settle and pay $35 million to affected investors.

Carolyn M. Welshhans, the associate director of SEC’s enforcement division, said the settlement allows them to return a significant amount of money to investors.

It also requires additional measures to protect those investors, including the disabling of tokens to prevent their future sale.

She also said that the actions against Balina protects investors “by seeking to hold accountable an alleged crypto asset promoter for failures to follow the federal securities laws.”

Reference:

SEC charges crypto influencer Ian Balina over unregistered ICO in 2018


Opinions expressed by Coin Week contributors are their own.

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