CDS Crypto News Court Rules Crypto Influencer Ian Balina Violated Securities Laws in SPRK Token Case
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Court Rules Crypto Influencer Ian Balina Violated Securities Laws in SPRK Token Case

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Court Rules Crypto Influencer Ian Balina Violated Securities Laws In Sprk Token Case

Court Rules Crypto Influencer Ian Balina Violated Securities Laws in SPRK Token Case

In a significant legal development, the U.S. District Court for the Western District of Texas has ruled that crypto influencer Ian Balina violated securities laws by offering and selling SPRK tokens, which were classified as securities under the Howey test. The court granted partial summary judgment in favor of the Securities and Exchange Commission (SEC), affirming that U.S. securities laws apply to Balina’s activities.

The SEC’s complaint, filed on September 19, 2022, alleged that Balina purchased $5 million worth of SPRK tokens from Sparkster, Ltd. in May 2018. He then organized an investment pool of approximately 68 individuals, offering and selling SPRK tokens without registering the offering with the SEC as required by federal securities laws.

Additionally, the SEC claimed that Balina promoted SPRK tokens on YouTube, Telegram, and other social media platforms between May and July 2018, without disclosing a 30 percent bonus provided by Sparkster as compensation for his promotional efforts.

Balina was charged with violating the offering registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and with violating Section 17(b) of the Securities Act for failing to disclose the consideration received for his promotions. The SEC sought partial summary judgment on the unregistered offering violation and requested a ruling that SPRK tokens were offered and sold as securities.

Alongside these charges, the SEC issued a cease-and-desist order against Sparkster Ltd. and its CEO, Sajjad Daya. The company contributed over $35 million to a fund for harmed investors and paid various other fees and penalties.

The promotional charges against Balina remain unresolved. The SEC alleged that Balina promoted SPRK tokens on social media without disclosing the 30% bonus he received from Sparkster Ltd. in exchange for his promotions, which falls under Section 17(b) of the Securities Act. Balina moved for summary judgment on both SEC claims, but the court denied his requests and left the promotional charges to be decided later.

Court Rules Crypto Influencer Ian Balina Violated Securities Laws In Sprk Token Case

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