SEC wins case against YouTuber Ian Balina for unregistered crypto ICO promo
The court found SPRK was an investment contract under the securities-determining Howey test — where investors pool money into a common enterprise expecting profits due to the efforts of others
Crypto YouTube personality Ian Balina sold unregistered securities when he bought Sparkster (SPRK) tokens and offered them to United States investors in an investment pool, according to a Texas federal court judge's ruling.
"The Court has determined, as a matter of law, that U.S. securities laws are applicable to Balina's actions and that SPRK tokens qualify as securities," Judge David Alan Ezra wrote in a May 22 order, granting a partial victory to the Securities and Exchange Commission, which filed the lawsuit in 2022.
The court found SPRK was an investment contract under the securities-determining Howey test — where investors pool money into a common enterprise expecting profits due to the efforts of others.
Judge Ezra agreed with the SEC that Balina "purposefully targeted United States investors" and knocked back the influencer's summary judgment bid, claiming the SEC had no sway as the sales happened overseas.
The SEC did not succeed in its claim that Balina failed to properly disclose a compensation agreement made with Sparkster CEO Sajjad Daya, as the court identified factual inconsistencies.
