Image source: Decrypt
The US Securities and Exchange Commission (SEC) says crypto influencer Ian Balina broke the rules during Sparkester’s $ 30,000 ICO over four years ago.
As a result, the SEC is charging the crypto influencer.
The SEC says the crypto personality has not filed a registration statement with the Commission for listing and selling Sparkster’s SPRK tokens.
No exemption from registration was reportedly applicable.
According to the SEC, Balina did not disclose the commission he received for promoting the initial offerings of SPRK or ICOICO coins on social media.
Sparkster initially offered investors a portion of its “No Code” software development platform by purchasing SPRK tokens.
Tokens are designed to allow users to develop software with minimal technical programming skills.
As a result, the SEC is calling for “injunctive relief, disgorgement, civil penalties, and other appropriate and necessary equitable relief.”
If the allegations are confirmed, Balina will no longer be able to promote the titles.
According to the filing, contributions were made to Ethereum to participate in the ICO in the United States.
The file goes:
“[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 “take this fight public.”
“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 has given the Sparkster token a 90% Hall of Fame classification in its ICO investment chart.
He also promoted it to users in a private Telegram group of about 50 people, according to the SEC filing.
Since then, the Cayman Islands-based company has been dissolved.
The SEC-approved SPRK ICO took place between April and July 2018.
It has raised approximately $30 million from nearly 4,000 investors in the United States and abroad.
Balina would have signed an agreement to invest $ 5 million in the Sparkster offer before promoting tokens on YouTube, Telegram, and other social media platforms.
While the SEC said that it would accept a 30% Sparkster bonus on tokens bought in supply, Balina has never revealed its consideration for promotion.
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Yesterday, the SEC announced that Sparkster and CEO Sajjad Daya have agreed to pay $ 35 million to interested investors.
Carolyn M. Welshhans, deputy director of the application of the SEC, said that the agreement had made it possible to give an important 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 Balina lawsuit protects investors “by seeking to hold accountable an alleged crypto asset promoter for failures to follow the federal securities laws.”