The U.S. Securities and Exchange Commission (SEC) has ordered crypto firm Sparkster and its CEO to pay $35 million into a fund for distribution to harmed investors. The securities regulator also charged crypto influencer Ian Balina for promoting crypto tokens without disclosing compensation received.
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 raised $30 million from 4,000 investors in the United States and abroad.
They told investors that SPRK tokens would increase in value, promising to make the tokens available on a crypto 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 to refrain from participating in crypto asset securities offerings for five years.
The SEC detailed:
Sparkster and Daya agreed to settle and to collectively pay more than $35 million into a fund for distribution to harmed investors.
Crypto Influencer Ian Balina Charged by SEC
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.”
The SEC explained that Balina purchased $5 million worth of SPRK crypto tokens and promoted them on Youtube, Telegram, and other social media platforms from approximately May to July 2018. The regulator elaborated:
Balina allegedly failed to disclose that Sparkster had agreed to provide him a 30 percent bonus on the tokens that he purchased, as consideration for his promotional efforts.
The crypto influencer also allegedly organized an investing pool of at least 50 individuals to whom he offered and sold the unregistered tokens, the securities watchdog noted.
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. This frivolous SEC charge sets a bad precedent for the entire crypto industry. If investing in a private sale with a discount is a crime, the entire crypto VC space is in trouble. 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? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Credit: Source link
