The US Securities and Exchange Commission (SEC) has ordered crypto company Sparkster and its CEO to pay $35 million in a fund for distribution to affected investors. Influential crypto securities regulator Ian Ballina has also been accused of promoting crypto-tokens without disclosing the compensation received.
SEC cease and desist order against an unregistered crypto company
The U.S. Securities and Exchange Commission (SEC) announced Monday that it has issued a cease and desist order against Sparkster Limited and its CEO, Sajjad Daya, for “the unregistered offer and sale of securities of crypto assets from April 2018 through July 2018..”
The SEC explained that “by offering and selling crypto-asset securities called SPRK Tokens” to raise funds for the development of the Sparkster 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, and promised to make the tokens available on the crypto trading platform.
In a settlement with the Securities and Exchange Commission, Sparkster agreed to destroy the remaining crypto-tokens, request the removal of its tokens from exchanges, and post the SEC’s order on its website and social media channels. Daya has agreed to refrain from participating in securities offerings for crypto assets for a period of five years.
The Securities and Exchange Commission (SEC) has detailed:
Sparkster and Daya agreed to settle and collectively pay more than $35 million into a fund for distribution to affected investors.
Crypto Influencer Ian Ballina Charged by SEC
The Securities Regulatory Authority also announced Monday that it has “indicted crypto influencer Ian Ballina for failing to disclose compensation he received from Sparkster for publicly promoting its tokens and for failing to file a registration statement with the Securities and Exchange Commission for resold Sparkster tokens.”
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.
It is alleged that Balina failed to disclose that Sparkster had agreed to give him a 30 percent reward on the tokens he purchased, in exchange for his promotional efforts.
The crypto influencer also allegedly organized an investment group of at least 50 individuals who offered and sold unregistered tokens, the SEC noted.
Balina has been accused of violating the filing-off provisions of the Securities Act, the Securities and Exchange Commission explained, adding that she is “seeking injunctive relief, pretrial relief, and civil penalties.”
In response to the SEC announcement, Ballina tweeted: “Excited to take this fight to the public. These SEC petty fees set a bad precedent for the entire crypto industry. If investing in a private discount sale is a crime, the entire cryptocurrency space is in trouble. They refused. compromise so they have to prove themselves.”
What do you think of the SEC’s action against Sparkster and crypto influencer Ian Ballina? Let us know in the comments section below.
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