The U.S. Securities and Exchange Commission (SEC) has charged self-described crypto influencer Ian Balina for allegedly not filing a registration statement with the commission for his offering and sale of Sparkster’s SPRK tokens between May 2018 to July 2018, while no exemption from registration was applicable.
The SEC also alleges that Balina failed to disclose the compensation he received from the issuer for publicly promoting the tokens.
According to the SEC, Balina bought $5 million worth of tokens, upon which he would get a 30% bonus for his promotions.
The SEC is seeking “injunctive relief, disgorgement plus prejudgment interest, and civil penalties.” If Balina is found guilty, he would be unable to promote securities again.
Sparkster offered investors a slice of its “no-code” software development platform by purchasing SPRK tokens. It is claimed that this code allows users to develop software with minimal technical coding skills.
According to the filing, the Ethereum contributions made to participate in the ICO all took place in the US.
The filing states, “[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 announced on Twitter that he is “excited to take this fight public,” and released an official statement which said that the agency’s charges “are an unfounded effort based upon multiple misconceptions of fact and law.”
He also revealed that he refused to settle with the agency. On the other hand, Sparkster and its CEO Sajjad Daya agreed to settle and pay more than $35 million into a fund for distribution to harmed investors.
Carolyn M. Welshhans, Associate Director of the SEC’s Division of Enforcement said that “the SEC’s action against Balina further protects investors by seeking to hold accountable an alleged crypto asset promoter for failures to follow the federal securities laws.”
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