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


The United States Securities and Exchange Commission (SEC) has ordered cryptocurrency company Sparkster and its CEO to pay $35 million into a fund to be distributed to affected investors. The securities regulator also charged crypto influencer Ian Balina for promoting crypto tokens without disclosing the compensation received.

SEC Stop and Cancellation Order for Unregistered Cryptocurrency Company

The United States 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 offering and sale of unregistered crypto-asset securities from April 2018 to July 2018. “

The SEC explains that “by offering and selling crypto-asset securities known as SPRK tokens” to raise money for Sparkster’s software platform development:

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

They told investors that the SPRK token would increase in value, promising the offering of these tokens on the cryptocurrency trading platform.

In a settlement with the SEC, Sparkster agreed to burn its remaining crypto tokens, order its tokens to be removed from trading platforms, and publish the SEC order on the website. and its social media channels. Daya has agreed not to participate in crypto asset securities offerings for 5 years.

The SEC detailed:

Sparkster and Daya agreed to settle and jointly pay more than $35 million into a fund to be distributed to affected investors.

Crypto Influencer Ian Balina Charged by SEC

The securities regulator also announced Monday that it has “charged crypto influencer Ian Balina for failing to disclose the compensation he received from Sparkster for publicly promoting its tokens and did not submit a registration statement with the SEC for the 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 between May and July 2018. Manager explains:

Balina allegedly failed to disclose that Sparkster had agreed to offer him a 30% bonus on tokens he had purchased, as a consideration for his promotional efforts.

The crypto influencer is also alleged to have organized an investment group of at least 50 individuals to whom he offered and sold unregistered tokens, the securities watchdog noted.

Balina was accused of violating the registration provisions of the Securities Act offering, the SEC detailed, adding that it “seeks relief by order, grievance plus prejudiced interest and civil penalties”.

In response to the SEC announcement, Balina tweeted: “Nice to go public with this fight. This frivolous SEC fee sets a bad precedent for the entire crypto industry. If investing in a private sale at a discount is a crime, the entire crypto VC space is in trouble. Has refused to settle so they have to prove themselves. “

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

Kevin Helms

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




Image credits: Shutterstock, Pixabay, Wiki Commons

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