Ian Balina, a prominent crypto influencer, has been found guilty of violating U.S. securities laws in a recent ruling by a U.S. district court. Judge David Alan Ezra determined that Balina had promoted and sold SPRK tokens without proper disclosure, concluding that the tokens qualified as securities under the Howey Test.
The charges against Balina stem from his involvement in the unregistered initial coin offering (ICO) of SPRK tokens, which took place in September 2022. The Securities and Exchange Commission (SEC) argued that these tokens required registration and disclosure.
The court found that Balina had promoted and sold SPRK tokens through various social media platforms, including YouTube and Telegram, without disclosing that he was receiving a 30% bonus as compensation for these promotions. This failure to disclose was deemed a violation of Section 17(b) of the Securities Act.
Balina had also organized an investment pool where he offered SPRK tokens to investors, but failed to properly disclose his financial interest in the tokens he received from Sparkster, the company behind SPRK.
According to the SEC, the token offering raised approximately $30 million from nearly 4,000 investors between April and July 2018, both domestically and internationally.
In response to the SEC’s charges, Balina’s website published a statement dismissing the allegations as “baseless.” The statement argued that Balina did not receive any compensation and provided no evidence to support the SEC’s claims. It also suggested that Balina may have been a victim of fraud by the Sparkster team, similar to other investors.
It remains to be seen what penalties Balina may face as a result of this ruling.