SEC Victorious: Ian Balina Found Guilty in Unregistered ICO Promotion Case

A federal judge in the United States has ruled in favor of the Securities and Exchange Commission (SEC) in a case against YouTuber Ian Balina, finding that he violated securities laws by participating in an unregistered initial coin offering (ICO) for Sparkster (SPRK) tokens in 2018. The judge determined that Balina's actions constituted the sale of unregistered securities to U.S. investors through an investment pool, agreeing with the SEC's argument that SPRK tokens qualified as securities under the Howey test. Despite Balina's attempt to argue that the SEC lacked jurisdiction as the sales occurred overseas, the court disagreed, stating that he had targeted U.S. investors. However, the court did not find merit in the SEC's claim regarding Balina's alleged failure to disclose a compensation agreement with Sparkster CEO Sajjad Daya. Balina's lawyer expressed disagreement with the court's decision and indicated plans to appeal. The SEC's lawsuit detailed Balina's promotion of SPRK tokens across social media platforms and creation of an investment pool without disclosing a bonus agreement with Sparkster. Sparkster itself settled with the SEC in 2022, agreeing to destroy remaining SPRK tokens and pay substantial penalties without admitting or denying the regulator's allegations.