U.S. Securities and Exchange Commission has ordered Sparkster and Sparkster’s CEO to contribute $35 million towards a fund that distributes to investors to harm. In addition, the securities regulator charged Ian Balina with promoting cryptocurrency tokens and not disclosing any compensation.
SEC’s Cease-and-Desist Order Against Unregistered Crypto Firm
The U.S. Securities and Exchange Commission (SEC) announced Monday that it has issued a cease-and-desist order against Sparkster Ltd. and its CEO, Sajjad Daya, “for the unregistered offer and sale of crypto asset securities from April 2018 through July 2018.”
The SEC explained that “by offering and selling crypto asset securities called SPRK tokens” to raise money to develop Sparkster’s software platform:
Sparkster and Daya were funded by 4,000 international investors.
Investors were told that SPRK tokens would rise in value and they promised to make them available for trading on a cryptocurrency trading platform.
In a settlement with the SEC, Sparkster agreed to destroy its remaining crypto tokens, request the removal of its tokens from trading platforms, and publish the SEC’s order on its website and social media channels. Daya agreed not to take part in any crypto asset securities offering for the next five years.
Sparkster and Daya agreed on a settlement, and they will collectively contribute more than $35,000,000 to an investment fund that helps investors.
SEC Charges Crypto Influencer Ian Balina
The securities regulator also announced Monday that it has “charged crypto influencer Ian Balina for failing to disclose compensation he received from Sparkster for publicly promoting its tokens and failing to file a registration statement with the SEC for Sparkster tokens that he resold.”
SEC revealed that Balina had purchased SPRK cryptocurrency tokens worth $5 million and promoted them through Youtube, Telegram, or other social media platforms, from May 2018 to July 2018. According to the regulator,
Balina, allegedly for failing to tell Sparkster that he had purchased tokens from Sparkster in exchange for promotional activities.
According to the Securities Watchdog, the crypto-influencer also organized an investment pool with at least 50 people. He offered and sold unregistered tokens.
Balina is charged with violating the offering registration provisions of the Securities Act, the SEC detailed, adding that it “seeks injunctive relief, disgorgement plus prejudgment interest, and civil penalties.”
Responding to the SEC’s announcement, Balina tweeted: “Excited to take this fight public. The SEC’s frivolous charge is a setback for all crypto companies. The entire crypto VC industry is at risk if investing in a private deal with a discount becomes a crime. Turned down settlement so they have to prove themselves.”
What do you think about the SEC’s action against Sparkster and crypto influencer Ian Balina? Leave your comments below.
Image creditShutterstock. Pixabay. Wiki Commons
DisclaimerThis article serves informational purposes. This article is not intended to be a solicitation or offer to sell or buy any product, service, or company. Bitcoin.com is not a provider of investment, tax, legal or accounting advice. This article does not contain any information, products, or advice that can be used to cause or alleged result in any kind of damage.