A US district court has found influential crypto player Ian Balina guilty of violating US securities laws.
According to recent court filings, Judge David Alan Ezra ruled that Balina is guilty of promoting and selling SPRK tokens without proper disclosure. The judge ruled that SPRK tokens meet the criteria of the Howey Test, making them securities.
In September 2022. Balin was charged in connection with his participation in an unregistered initial coin offering(ICO) of SPRK tokens. The Securities and Exchange Commission (SEC) said the tokens required proper registration and disclosure.
The court found that Ian Balina was involved in promoting and selling SPRK tokens through various social media platforms, including YouTube and Telegram. Balina failed to disclose that he was being paid a 30% bonus for these promotions, which the court said was a violation of Section 17(b) of the Securities Act.
Balina organized an investment pool in which he offered SPRK tokens to investors. The SEC stressed that he failed to properly disclose his financial interests in the tokens he received from Sparkster, the company behind SPRK.
The commission said the token offering raised about $30 million from nearly 4,000 investors located overseas and in the US between April and July 2018.
Ian Balina’s response to the SEC’s allegations
Balina’s website posted a response to the SEC’s “baseless” allegations, claiming: “This is the first time that a private pre-sale purchase of a digital asset token has been accused of being ‘compensation’ in exchange for publicity.”
“The charges proposed by the Security and Exchange Enforcement Division (SEC) against Mr. Balin are a baseless effort based on many misconceptions of fact and law, listed below,” the post reads.
The response stated that Balina has not received any compensation and there is no evidence to support such claims. It also claimed that he made no profit on his purchase, suggesting that he, like other investors, may have been the victim of fraud by the Sparkster team.
