SEC Wins Case Against Crypto Influencer Ian Balina For Securities Laws Violation

Share This Post

On Wednesday, a Texas federal court judge ruled in favor of the US Securities and Exchange Commission (SEC) in the case against crypto influencer Ian Balina. The case is part of the Sparkster saga that started in 2018.

The Case Against The Crypto Influencer

In 2022, influencer and Token Metrics CEO Ian Balina was accused of violating securities laws. The SEC charged Balina for his involvement in the Initial Coin Offering (ICO) of an unregistered security.

According to the court documents, Software development company Sparkster Ltd conducted an unregistered securities offering with the Sparkster (SPRK) token between April and July 2018. The ICO raised around $30 million from 4,000 US-based and international investors.

The Commission argues that Balina violated Sections 5(a) and 5(c) of the Securities Act after selling and offering to sell unregistered securities through his Sparkster pool. Moreover, they alleged that the crypto influencer failed to disclose the “considerations received” from buying and promoting the token, violating Section 7.

In the lawsuit, the SEC claimed that Balina had agreed to receive a 30% bonus from Sparkster for purchasing 43,333,333 SPRK tokens at $0.15. This bonus was part of a deal between the crypto influencer and the company’s CEO, Sajjad Daya.

Daya and Balina allegedly negotiated a contract in May 2018, in which YouTubers would buy and promote the SPRK tokens on their platforms. In the following months, Balina endorsed his “Sparkster Private Sale Whitelist” to his Patreon and Telegram members.

However, the influencer failed to address his contract with the company while promoting the token. Instead, he stated it was “not a paid endorsement” and that he “was not paid off by Sparkster” on different occasions.

Judge Grants Victory To The SEC

Balina contended the SEC’s claims in November 2022.  He argued “he was fooled by Sparkster,” adding that he lost money after purchasing the crypto tokens, like the other pool members.

He also denied receiving compensation for recommending the SPRK tokens. The influencer alleged receiving “a volume discount during a private pre-sale purchase,” the same “other purchasers typically received in the industry.”

Moreover, the defendant claimed that the Court should “grant Summary Judgment in his favor” since the SPRK tokens were not securities. Similarly, the court documents revealed that the YouTuber considered that “liability did not attach in the United States” as he was outside the country during the promotional period.

On May 22, Judge David Alan Ezra ruled in favor of the SEC. The Court granted the Commission partial victory and denied Balina’s Motion for Summary Judgment.

Crypto

As seen in the document, the Court considered that the influencer’s ties to the US were sufficient to show he “purposefully targeted” American investors. This decision was based on the use of US social media platforms and the larger share of US-based investors in the Sparkster pool.

Judge Ezra also considered that Balina had violated Securities laws as there was “sufficient evidence to show that Sparkster sought money from investors,” and STRK tokens meet the criteria of the Howey test.

Ultimately, the SEC failed to prove that the influencer violated Section 7. The court stated that there were factual inconsistencies in whether there was a prior agreement for compensation in exchange for promotion. As a result, the court declined to decide this issue on summary judgment.

Crypto, TOTAL

Read Entire Article
spot_img
- Advertisement -spot_img

Related Posts

Restaked Bitcoin Protocols Skyrocket 4,459% in Just 9 Months

Since the advent of restaking bitcoin and Babylon’s leading role in the space, restaked bitcoin protocols have exploded onto the scene with phenomenal momentum Over the past nine months, these

Bitcoin Rebounds Above $85,000 Amid Weak Market Demand

Bitcoin (BTC) is experiencing a notable price recovery, reclaiming the $85,000 level after a 43% increase in the past 24 hours This rebound has sparked renewed optimism among investors, who are now

Bitcoin Panic Sellers Lost $100M – Why Smart Investors Are Betting on BTC Bull Token Instead

The crypto market is full of surprises, but one thing remains consistent: panic selling always costs new investors a fortune  In the last six weeks alone, speculators dumped their Bitcoin holdings,

Cardano (ADA) Whales Buy 130M Tokens, Bull Run Incoming?

The post Cardano (ADA) Whales Buy 130M Tokens, Bull Run Incoming appeared first on Coinpedia Fintech News As the Cardano (ADA) price continues to consolidate near a crucial support level of $065,

Crypto Expert Reveals Why XRP Will Never Flip Ethereum

A crypto expert has promptly shut down the idea that XRP will ever surpass Ethereum In his post, the analyst shared several reasons why he believes such an outcome is highly unlikely, highlighting

Bitcoin Price Watch: Struggles at $84K—Will Bulls Take Control?

Bitcoin traded at $84,222 on March 15, 2025, with a market capitalization of $167 trillion, a 24-hour global trade volume of $2599 billion, and an intraday price range between $82,705 and $85,139,