The US Securities and Exchange Commission (SEC) has ordered CryptoFirst Sparkster and its CEO to pay a $35 million fund to be distributed to affected investors. The securities regulator has accused crypto influencer Ian Ballina of promoting crypto tokens without disclosing the compensation he received.
SEC Cease and Desist Order on Unregistered Crypto Firm
The US Securities and Exchange Commission (SEC) announced on Monday that it had issued a cease-and-desist order against Sparkster Ltd and its CEO Sajjad Daya for the unregistered offer and sale of crypto asset securities between April 2018 and July 2018. He said.
The SEC described it as “offering and selling crypto asset securities called SPRK tokens” to raise funds to develop Sparkster’s software platform.
Sparkster and Daya have raised $30 million from 4,000 investors in the US and abroad.
They told investors that SPRK tokens will increase in value, promising to offer the tokens on a crypto trading platform.
In a settlement with the SEC, Sparkster agreed to destroy the remaining crypto tokens, request that the tokens be removed 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 listed:
Sparkster and Daya agreed to settle and jointly pay the fund to distribute more than $35 million to vulnerable investors.
Crypto influencer Ian Ballina has been sued by the SEC
“Crypto influencer Ian Ballinan has been sued for failing to disclose compensation he received from Sparkster for publicly promoting the tokens and failing to file a registration statement with the SEC for the Sparkster tokens he resold,” the securities regulator said Monday.
The SEC explained that Ballina purchased approximately $5 million worth of SPRK crypto tokens between May and July 2018 and promoted them on YouTube, Telegram and other social media platforms.
Ballina did not disclose that it had agreed to give Sparkster a 30 percent bonus on the tokens it bought in consideration for its promotional efforts.
The securities regulator revealed that the crypto influencer organized an investment involving at least 50 individuals and offered and sold unregistered tokens.
Ballina is accused of violating the registration provisions of the Securities Act, the SEC detailed, “and seeks injunctive relief, disgorgement and injunctive relief and civil penalties.
Responding to the SEC’s announcement, Ballina tweeted: “So excited to see this fight officially. This ridiculous SEC charge sets a bad example for the entire crypto industry. If investing in private sales at a discount is a crime, the entire crypto VC space is in trouble. They rejected a deal to prove themselves.
What do you think about the SEC’s action against Sparkster and crypto influencer Ian Ballina? Let us know in the comments section below.
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