The U.S. Securities and Exchange Commission has ordered Sparkster and its CEO $35 million to be paid into a fund to distribute to investors who have been harmed. The securities regulator also accused Ian Balina, a crypto influencer, of promoting crypto tokens and not disclosing any compensation received.
SEC's Cease and Desist Order Against Unregistered crypto firms
The U.S. Securities and Exchange Commission (SEC), announced Monday that it had issued a cease and desist order against Sparkster Ltd. and Sajjad Daya, its CEO, "for the unregistered sale and offer of crypto assets securities from April 2018 to July 2018."
According to the SEC, "by selling and offering crypto assets called SPRK tokens to raise funds to develop Sparkster’s software platform":
Sparkster and Daya received $30 million in funding from over 4,000 investors across the United States and around the world.
Investors were told that SPRK tokens would rise in value and they promised to make the tokens accessible on a crypto trading platform.
Sparkster reached a settlement agreement with the SEC. It agreed to dispose of all its crypto tokens and request that their tokens be removed from trading platforms. The SEC also published the order on its website as well as its social media channels. Daya has agreed to not participate in the offering of crypto assets securities for five years.
The SEC provided more details:
Sparkster and Daya reached a settlement and agreed to pay $35 million each to a fund to distribute to investors who were harmed.
SEC Charges Crypto Influencer Ian Balina
Monday's announcement by the securities regulator included a statement stating that Ian Balina, a crypto influencer, was "charged with failing to disclose the compensation he received form Sparkster for publically promoting its tokens as well as failing to file a registration declaration with SEC for Sparkster tokens he resold."
SEC explained that Balina bought $5 million worth SPRK tokens and promoted them via Youtube, Telegram and other social media platforms between May and July 2018. The regulator went on:
Balina, allegedly, failed to tell Sparkster that he had offered him a 30% bonus on tokens he bought as compensation for his promotional efforts.
According to the securities watchdog, the crypto influencer also organized an investment pool with at least 50 people to which he sold and offered unregistered tokens.
Balina was charged with violating Securities Act offering registration provisions, according to the SEC. The SEC also stated that it seeks injunctive relief and disgorgement plus prejudgment interests, as well as civil penalties.
Balina responded to the SEC announcement by tweeting: "Excited for this fight to be made public. This frivolous SEC accusation sets a poor precedent for the entire cryptocurrency industry. The entire crypto VC industry is at risk if investing in a private sale is a crime. They were turned down for settlement and have to prove their worth."
What did you think of the SEC's actions against Sparkster? Comment below to let us know your thoughts.
By: Kevin Helms
Title: SEC Orders Crypto Firm to Pay Harmed Investors $35 Million — Charges Influencer Ian Balina
Sourced From: news.bitcoin.com/sec-orders-crypto-firm-to-pay-harmed-investors-35-million-charges-influencer-ian-balina/
Published Date: Tue, 20 Sep 2022 02:30:52 +0000