SEC Orders Crypto Firm to Pay $35M to Harmed Investors — Charges Influencer Ian Balina – Regulated Bitcoin News

The U.S. Securities and Exchange Commission (SEC) has ordered crypto firm Sparkster and its CEO to pay $35 million to a fund for distribution to aggrieved investors. The securities regulator also accused crypto influencer Ian Balina of promoting crypto tokens without disclosing the compensation he received.

SEC’s cease and desist order against unregistered crypto companies

The U.S. Securities and Exchange Commission (SEC) announced Monday that it has issued a cease and desist order against Sparkster Ltd. and its CEO, Sajjad Daya, “for the unregistered offerings and sales of cryptoasset securities between April 2018 and July 2018.”

The SEC explained that funds were raised to develop Sparkster’s software platform “through the offering and sale of cryptoasset securities called SPRK tokens”:

Sparkster and Daya raised $30 million from 4,000 investors in the US and abroad.

They told investors that the SPRK token would increase in value and promised to offer the token on a crypto exchange.

In the settlement with the SEC, Sparkster agreed to destroy its remaining crypto tokens, require its tokens to be removed from the exchange, and post the SEC’s order on its website and social media channels. Daya agreed not to participate in the issuance of crypto-asset securities for five years.

SEC details:

Sparkster and Daya agreed to settle and jointly pay more than $35 million to a fund for distribution to aggrieved investors.

SEC Charges Crypto Influencer Ian Balina

The securities regulator also announced Monday that it “charged crypto influencer Ian Balina for failing to disclose compensation he received from Sparkster for publicly promoting his token and for failing to file a filing with the SEC. Registration Statement for Sparkster Tokens he resold.”

The SEC explained that Balina purchased $5 million worth of SPRK crypto tokens and promoted them on Youtube, Telegram and other social media platforms around May-July 2018. The regulator details:

Balina allegedly did not disclose that Sparkster had agreed to give him a 30% bonus on tokens he purchased as consideration for his promotion.

The securities regulator noted that the cryptocurrency influencer also allegedly organized an investment pool of at least 50 people to whom he offered and sold unregistered tokens.

The SEC detailed that Balina was charged with violating the offering registration provisions of the Securities Act, adding that it “seeks injunctive relief, disgorgement and prejudgment interest, and civil penalties.”

Responding to the SEC’s statement, Balina tweeted: “Glad to bring this fight to the fore. This frivolous SEC charge sets a bad precedent for the entire crypto industry. If investing at a discount Private sale is a crime, then the whole crypto VC space is in trouble. Refused to settle, so they have to prove themselves.”

tags in this story

Ian Ballina, SFC, second encryption, Sec Amballina, Unregistered cryptocurrencies in seconds, spark plug, Sparkster cryptocurrency, Sparkster Ian Ballina, Sparkster pays investors, Civil Affairs Bureau, SPRK SEC, PUK token, SPRK unregistered token

What do you think of the SEC’s actions against Sparkster and cryptocurrency influencer Ian Balina? Let us know in the comments section below.

Kevin Helms

As an Austrian economics student, Kevin discovered Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects, and the intersection between economics and cryptography.




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