Key Takeaways:
- Ian Balina was found guilty of selling unregistered securities by offering Sparkster (SPRK) tokens to U.S. investors, deemed securities under the Howey test.
- The SEC’s lawsuit, partially upheld by the court, targeted Balina for promoting SPRK tokens without disclosing a 30% bonus received.
- Sparkster agreed to significant penalties and the destruction of its remaining tokens following the SEC’s action.
Crypto YouTuber Ian Balina has been found to have sold unregistered securities by buying and offering Sparkster (SPRK) tokens to U.S. investors in an investment pool, according to a Texas federal court judge.
The court ruled that U.S. securities laws apply to Balina’s actions, and that SPRK tokens are considered securities under the Howey test, which defines investment contracts.
SEC VICTORIOUS IN CASE AGAINST CRYPTO YOUTUBER
— BSCN (@BSCNews) May 24, 2024
– A Texan Federal court judge has ruled in favor of the SEC in its case against popular crypto YouTuber Ian Balina @DiaryofaMadeMan.
– The court rules that Balina had sold unregistered securities to American users by offering… https://t.co/d2myCCjyTn pic.twitter.com/m2Rc2Yc5rE
The SEC had filed a lawsuit in 2022, claiming that Balina targeted U.S. investors and promoted SPRK tokens without disclosing a 30% bonus he received from Sparkster’s CEO.
Judge David Alan Ezra’s May 22 order granted a partial victory to the SEC, rejecting Balina’s argument that the SEC lacked jurisdiction because the sales occurred overseas.
SEC wins case against YouTuber Ian Balina for unregistered crypto ICO promo
— ICO Drops (@ICODrops) May 24, 2024
Crypto YouTuber Ian Balina sold unregistered securities when he bought Sparkster $SPRK tokens and offered them to United States investors in an investment pool, a Texas federal court judge has ruled.… pic.twitter.com/Byiy3o8AgC
However, the court did not uphold the SEC’s claim that Balina failed to disclose his compensation agreement due to factual inconsistencies.
The SEC’s lawsuit stated that Balina purchased $5 million worth of SPRK tokens and promoted them on social media, forming an investment pool via Telegram between May and July 2018.
Sparkster, a “low-code” blockchain application platform, conducted its ICO from April to July 2018.
missed this earlier:
— Tim Copeland (@Timccopeland) May 23, 2024
Crypto influencer Ian Balina violated US securities law by selling and offering to sell to investors the SPRK token, a federal judge ruled, finding the token was an unregistered security.https://t.co/IW1bpiNFA3
In September 2022, Sparkster agreed with the SEC to destroy its remaining tokens, cease trading, and pay $30 million in disgorgement, $4.6 million in interest, and a $500,000 civil penalty. Balina has not yet commented on the ruling.
About The Author
Victor Fawole, a seasoned Web3 content creator and social media influencer, excels in bringing the pulse of the crypto world to our readers.
With a keen eye for emerging trends and a talent for engaging storytelling, Victor’s articles offer a fresh perspective on the ever-evolving digital currency landscape.
Check Victor out on:
