Court Sides with SEC Against YouTuber Ian Balina

Crypto investor and YouTuber Ian Balina violated U.S. securities laws in promoting and selling SPRK tokens, a Texas court ruled.

In 2022, the U.S. Securities and Exchange Commission (SEC) accused Balina of participating in the unregistered ICO of Sparkster.

The project marketed itself as a “no-code” development platform. It completed a crowdsale in July 2018, raising $30 million from participants.

According to the lawsuit, the blogger promoted SPRK tokens, which are considered securities. He failed to disclose the $5 million compensation received for advertising and resold the project’s coins through his own investment pool without registering them with the SEC.

Judge David Alan Ezra ruled that SPRK meets the criteria of the Howey Test and constitutes investment contracts. He also agreed with the Commission’s claim of Balina’s deliberate sale of tokens to U.S. investors.

However, Ezra dismissed the charge regarding the alleged non-disclosure of compensation received by the blogger from Sparkster in the form of a 30% discount on token purchases.

In September 2022, the company reached a settlement with the SEC to destroy its remaining tokens and delist the asset from trading platforms. Sparkster agreed to pay $30 million in compensation, $4.6 million in interest, and a $500,000 civil penalty.

Earlier that month, Balina launched a GoFundMe campaign to “fund the fight” against the SEC.