Amid Ethereum Approval, SEC Wins a Cryptocurrency Case!
The US Securities and Exchange Commission (SEC) won the case it filed against one-time cryptocurrency phenomenon Ian Balina.
US federal judge David Alan Ezra stated that the SEC violated the securities laws of Ian Balina, who stood out with ICO projects in 2018-2019.
According to the information conveyed, Whale sold unregistered securities by purchasing Sparkster (SPRK) tokens and presenting them to US investors with insufficient information and exaggerated promotion.
The SEC ordered Ian Balina and his Sparkster company to pay $30 million in damages, $4.6 million in interest, and a $500,000 fine.
The court ruled that SPRK was an investment contract and met the Howey test determining securities. According to the SEC, Ian Balina failed to properly disclose a compensation agreement he had with Sparkster CEO Sajjad Daya. But the court could not confirm such an agreement.
In the SEC's claim, it was emphasized that Ian Balina purchased SPRK for $ 5 million between May and July 2018 and promoted it on various social media platforms. It also created an investment pool for tokens and organized it through a Telegram group.
The SEC also claimed that Sparkster gave Whale a 30% bonus to investors in exchange for the tokens he sold. Whale said the SEC's alleged bonus was a standard volume discount in a private pre-sale agreement.
