Crypto

Crypto influencer Ian Balina sued by SEC for promoting Sparkster’s $30 million ICO

“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.”

The Securities and Exchange Commission has ordered Sparkster Ltd. and its CEO, Sajjad Daya, to collectively pay back more than $35 million to harmed investors for its unregistered offer and sale of crypto asset securities from April 2018 through July 2018.

Sparkster and Daya raised $30 million from 4,000 investors in the United States and abroad by offering and selling crypto asset securities called SPRK tokens to raise money to further develop Sparkster’s “no-code” software platform.

The regulator called the SPRK tokens, as offered and sold, as securities not applicable for a registration exemption and should have been registered with the SEC.

Without admitting or denying the SEC’s findings, Sparkster agreed to destroy its remaining tokens, request the removal of its tokens from trading platforms, and publish the SEC’s order on its website and social media channels. Sajjad Daya agreed to refrain from participating in offerings of crypto asset securities.

The SEC orders Sparkster to pay $30 million in disgorgement, $4,624,754 in prejudgment interest, and a $500,000 civil penalty. The SEC’s order imposes a $250,000 civil penalty against Sajjad Daya.

Ian Balina purchased $5 million worth of SPRK with 30% bonus

The SEC also pressed charges against crypto influencer Ian Balina for failing to disclose the compensation he received from Sparkster for publicly promoting the SPRK tokens and failing to file a registration statement with the SEC for Sparkster tokens that he resold.

The financial watchdog discovered he purchased $5 million worth of SPRK tokens and promoted SPRK tokens on YouTube, Telegram, and other social media platforms from approximately May 2018 to July 2018, according to a complaint filed in the United States District Court for the Western District of Texas.

According to the SEC, Balina failed to disclose that Sparkster had agreed to provide him a 30 percent bonus on the tokens that he purchased, as consideration for his promotional efforts.

Ian Balina also allegedly organized an investing pool of at least 50 individuals to whom he offered and sold SPRK tokens, despite not registering the offering with the SEC as required by federal securities laws and despite the lack of an applicable exemption from registration.

Carolyn M. Welshhans, Associate Director of the SEC’s Division of Enforcement, said: “The resolution with Sparkster and Daya allows the SEC to return a significant amount of money to investors and requires additional measures to protect investors, including the disabling of tokens to prevent their future sale. 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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