The U.S. Securities and Exchange Commission (SEC) said crypto influencer Ian Balina broke the rules during Sparkester’s $ 30,000 ICO in 2018.
As a result, the SEC is charging the crypto influencer.
The SEC claims that the crypto personality has not filed a registration statement with the Commission for Offering and Selling Sparkster’s SPRK Tokens.
An exemption from registration did not apply.
According to the SEC, Balina did not disclose what compensation he received for promoting SPRK’s or ICOICO’s initial coin offerings on social media.
Sparkster initially offered investors a portion of its “No Code” software development platform by purchasing SPRK tokens.
Tokens are claimed to allow users to develop software with minimal technical programming skills.
As a result, the SEC is calling for “bans, disgorging, civil penalties, and other fair measures that are appropriate and necessary.”
If the allegations are confirmed, Balina will no longer be able to promote any titles.
According to the filing, contributions to Ethereum to participate in the ICO were made in the United States.
The file 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.”
The crypto influencer responded to the news by taking to Twitter, where he announced he was excited to “go public with this fight.”
“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 a 90% “Hall of Fame” ranking on its ICO investment spreadsheet.
According to the SEC filing, it also promoted it to users of a private Telegram group of about 50 people.
The company, founded in the Cayman Islands, was dissolved.
The SPRK ICO, which the SEC confirmed was not registered, took place between April and July 2018.
It raised about $30 million 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 was accepting a 30% bonus from Sparkster on the tokens it bought as part of the offer, Balina never disclosed his consideration for her promotion.
Today, the SEC announced that Sparkster and CEO Sajjad Daya have agreed to pay $ 35 million to interested investors.
Carolyn M. Welshhans, the SEC’s deputy director of enforcement, said the deal allowed them to return a substantial amount of money to investors.
It also calls for additional measures to protect these investors, including disabling tokens to prevent future sales.
She also said the lawsuit against Balina protects investors “by seeking to hold accountable an alleged crypto asset promoter for failures to follow the federal securities laws.”