Image source: Decrypt
The U.S. Securities and Exchange Commission (SEC) says crypto influencer Ian Balina broke rules during Sparkester’s $30,000 ICO four years ago.
As a result, the SEC is charging the crypto influencer.
The SEC says the crypto personality has not filed a registration statement with the Commission for the offering and sale of Sparkster’s SPRK tokens.
A registration exemption was not applied.
According to the SEC, Balina did not disclose the compensation he received for promoting initial coin offerings from SPRK or ICOICO on social media.
Sparkster initially offered investors a portion of its “No Code” software development platform by purchasing SPRK tokens.
The tokens are designed to allow users to develop software with minimal technical programming skills.
Accordingly, the SEC is calling for “injunctive relief, disgorgement, civil penalties, and other appropriate and necessary equitable relief.”
If the allegations are confirmed, Balina will no longer be able to promote the titles.
According to the filing, contributions were made to Ethereum to participate in the ICO in the United States.
The file goes:
“[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.”
The crypto influencer responded to the news by taking to Twitter, where he announced he was excited to “take the 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.”
Balina awarded the Sparkster token with a 90% “Hall of Fame” classification in his ICO investment table.
According to the SEC filing, he also promoted it to users of a private telegram group of around 50 people.
The company, based in the Cayman Islands, has been dissolved.
The SPRK ICO, which was confirmed by the SEC, took place between April and July 2018.
He collected around $30 million US from nearly 4,000 investors in the United States and abroad.
Balina reportedly signed a deal to invest $5 million in the Sparkster offering before promoting the tokens on YouTube, Telegram, and other social media platforms.
While the SEC said it would accept a 30% bonus from Sparkster on tokens purchased under the offer, Balina never revealed its consideration for the promotion.
Today, the SEC announced that Sparkster and CEO Sajjad Daya have agreed to pay out $35 million to interested investors.
Carolyn M. Welshhans, deputy director of enforcement at the SEC, said the deal allowed them to return a significant amount of money to investors.
It also calls for additional measures to protect these investors, including disabling tokens to prevent future sales.
He also said the Balina lawsuit protects investors “by attempting to hold an alleged cryptocurrency promoter responsible for failing to comply with federal securities laws.”
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