SEC emerges victorious in lawsuit against YouTuber Ian Balina over unauthorized promotion of crypto ICO

Crypto YouTuber Ian Balina has been ruled to have sold unregistered securities when he purchased Sparkster (SPRK) tokens and offered them to investors in the United States. The ruling was made by a Texas federal court judge, who stated that U.S. securities laws apply to Balina’s actions and that SPRK tokens qualify as securities. The court determined that SPRK was an investment contract under the Howey test, as investors pooled money into a common enterprise with the expectation of profits. The judge also agreed with the Securities and Exchange Commission (SEC) that Balina intentionally targeted U.S. investors. The SEC had filed a lawsuit in 2022 against Balina, who purchased $5 million worth of SPRK tokens and promoted them on various social media platforms. Balina did not disclose that he had received a 30% bonus from Sparkster for the tokens. Sparkster conducted its initial coin offering (ICO) between April and July 2018 and later made a deal with the SEC to destroy its remaining SPRK tokens. It was ordered to pay a disgorgement of $30 million, interest of $4.6 million, and a civil penalty of $500,000. Balina has not yet commented on the ruling.