Court Rules Influencer Ian Balina Violated Securities Laws Promoting SPRK Tokens

cryptonews.com:

A U.S. district court has found crypto influencer Ian Balina guilty of violating U.S. securities laws.

According to recent court filings, Judge David Alan Ezra ruled that Balina was guilty promoting and selling SPRK tokens without proper disclosure. the judge ruled that SPRK tokens met the criteria of the Howey Test, making them securities.

Balina faced charges in September 2022 due to his participation in the unregistered initial coin offering (ICO) of SPRK tokens. The Securities and Exchange Commission (SEC) contended that these tokens necessitated appropriate registration and disclosure.

The court found that Ian Balina engaged in promoting and selling SPRK tokens through various social media platforms, including YouTube and Telegram.

Balina did not disclose that he was receiving compensation of a 30% bonus for these promotions, which the court determined was a violation of Section 17(b) of the Securities Act.

Balina organized an investment pool where he offered SPRK tokens to investors. The SEC highlighted that he failed to properly disclose his financial interest in the tokens he received from Sparkster, the company behind SPRK.

The SEC stated that the token offering raised approximately $30 million from nearly 4,000 investors located abroad and in the U.S. from April to July 2018.

Balina’s website posted a response to the SEC’s “baseless” charges, saying, “This is the first time a private pre-sale purchase of a digital asset token has been accused of being ‘compensation’ in exchange for publicity.”

“The Security and Exchange (SEC) Enforcement Division’s proposed charges against Mr. Balina are an unfounded effort based upon multiple misconceptions of fact and law, enumerated below,” the post reads.

The response asserted