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Ian Balina is facing charges of illegal securities sales during a 2018 ICO for Sparkster
The ICO king, who made his name shilling them in 2017 and 2018, has finally been charged
Sparkster yesterday settled with the SEC for $35 million
Ian Balina, the face that launched a thousand ICOs, has been charged with selling unregistered securities via a 2018 token sale for Sparkster. Balina, who promised to make followers millionaires from ICOs in 2017-18, was one of the original crypto influencers, with projects knowing that if it enlisted his services then it was almost guaranteed to sell out. Balina has been charged over his promotion of Sparkster, a 2018 ICO that yesterday settled with the Securities and Exchange Commission (SEC) for securities law violation as a result of the ICO.
Balina Received 30% SPRK Bonus
Balina was a well known figure during the 2017 ICO boom, but it is his actions during the 2018 ICO for Sparkster that has finally brought justice knocking. Sparkster, an alleged decentralised software platform, hired Balina to build awareness of the project (i.e. shill it), which he did, talking up the possible returns after the year-long lockup had passed.
That lockup ended in June 2019, by which time Balina had sniffed something in the air, stating in a video prior to a launch on a small decentralised exchange that “I’m just hoping I don’t lose money on Sparkster to be honest”.
What the buying public didn’t know was that Balina, in return for a $5 million investment, had received a 30% bonus, tokens he tried to sell privately in a Sparkster pool, away from the potential glare of exchanges. Sparkster dumped 92% on the day of its launch, with investors soon turning on Balina for his promotion of it. Balina claimed a few weeks later that he was joining a class action lawsuit against Sparkster CEO Sajjad Daya, but this hasn’t seen the light of day.
Same Old Story
However, more than three years after the Sparkster debacle, Balina’s actions are finally catching up with him, as they are with many who were involved in ICOs in 2017 and 2018. The SEC’s lawsuit concerns the “unregistered offering and promotion in 2018 of crypto asset securities called SPRK Tokens”, with yesterday’s filing outlining his new way of duping his followers:
“Balina, a self-described crypto asset investor, promoter, and influencer, who claimed he could help people “make millions with initial coin offerings,” failed to disclose the compensation he received from the issuer while he publicly promoted the tokens. He also failed to file a registration statement with the SEC for the tokens that he re-sold using an investing pool that he organized.”
Sparkster Settled with SEC for $35 Million
On the same day as Balina’s charges landed, Sparkster, which was targeted in September last year over its practices, agreed to a settlement with the SEC without any admission or denial of wrongdoing by CEO Sajjad Daya . As a result of the deal it will destroy any remaining tokens, issue requests for exchanges to delist its tokens and make the SEC’s order visible on its social media channels. Sparkster will also pay $30 million in disgorgements, $4,624,754 in prejudgment interest, and a $500,000 civil penalty.
The $30 million is the value of all the ETH raised during the ICO, ETH that Daya failed to cash out after the ICO, and which he eventually sold for just $900,000 month later once the crypto market had crashed. As part of the settlement, has agreed not to engage in crypto securities offerings for five years.
Balina is yet to comment on the charges.