A recent ruling by the U.S. District Court for the Western District of Texas has favored the Securities and Exchange Commission (SEC) in a case against popular crypto influencer Ian Balina. The court found that Balina had offered and sold SPRK Tokens as securities in unregistered transactions, confirming that US securities laws are applicable to his activities.
The SEC’s complaint, filed in September 2022, accused Balina of purchasing $5 million worth of SPRK tokens from Sparkster, Ltd. in May 2018. He then allegedly formed an investment pool of around 68 individuals, to whom he sold SPRK tokens without registering the offering with the SEC as required by federal securities laws.
In addition, the SEC alleged that Balina promoted SPRK tokens on various platforms without disclosing a 30 percent bonus provided by Sparkster as compensation for his promotional activities. The regulator charged Balina with violating multiple provisions of the Securities Act of 1933.
Along with the ruling against Balina, the SEC also issued a cease-and-desist order against Sparkster Ltd. and its CEO, Sajjad Daya. The company was required to set aside over $35 million for affected investors and pay additional fees and penalties.
Despite the partial summary judgment in favor of the SEC, Balina’s promotional charges remain unresolved. The SEC claimed that Balina failed to disclose the bonus he received for promoting SPRK tokens, a violation of Section 17(b) of the Securities Act. Balina had requested summary judgment on both SEC claims, but the court denied his requests, leaving the promotional charges pending.
