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Crypto Influencer Charged by SEC for Failing to Disclose Incentive to Promote Unregistered ICO

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The Securities and Exchange Commission (SEC) of the United States has filed a lawsuit against prominent crypto influencer, investor, and entrepreneur Ian Ballina for an initial coin offering (ICO) that took place in 2018.

The SEC charged Ballina with buying $5 million in SPRK tokens from Sparkster Ltd. and receiving 30% bonus tokens before promoting it on social media. According to media reports, he failed to disclose that he was paid to promote the ICO, which the regulator has charged in a lawsuit filed in federal court in Austin, Texas.

Sparkster and its CEO Sajjad Daya made headlines in 2018 and 2019 for failing to launch the SPRK tokens for which they had raised $30 million in ETH. In an intriguing twist, one of the Sparkster wallets from 2018 was activated for the first time in May 2022, and 14,200 ETH tokens were exchanged for $22.7 million USDC.  

Sparkster Ltd. raised $30 million from approximately 4,000 investors in an unregistered ICO between April and July 2018, according to an SEC statement issued on Monday. According to the company, it and its CEO, Sajjad Daya, have agreed to pay $35 million in a settlement to resolve investors’ claims of losses resulting from the unregistered SPRK offering.

During the ICO boom of 2017 and 2018, the SEC appears to have been on the lookout for unregistered ICOs that were defrauding investors. In several of these cases, it has filed lawsuits.

The agency charged three people in February with defrauding over $11 million through an ICO in 2018. Steven Seagal, a well-known American actor and martial artist specialist, was one of the project’s promoters.

The Commission charged three Rivetz Group companies and Rivetz Corp CEO Steven K. Sprague with conducting an unregistered ICO that raised $18 million last year. According to the SEC complaint, the defendants offered and sold digital assets known as RvT tokens to the general public, including US investors, between July and September 2017.

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Ian Ballina, 33, describes himself as a “World Renown Investor, Entrepreneur, Speaker, and Author” on his website and claims to have a master’s degree in computer science. He has also worked with IBM Watson as a data scientist. Ballina is the founder and CEO of Token Metrics, “a data analytics platform for crypto that helps investors leverage machine learning to become smarter investors.”

Ballina used Token Metrics analytics for crypto investments in 2017, and his $20,000 fund grew into a $5 million portfolio of crypto assets, according to his website.

His Response to the SEC, in which he dismisses accusations as “baseless,” is also available on his website. A 30% bonus is described as a “volume-based discount from the public sale price” and his investment in SPRK is described as “a private pre-sale purchase.”

In his court filing, Ballina defends himself against the SEC charges, describing the regulator’s allegations as a “unfounded effort based upon multiple misconceptions of fact and law.” Ballina’s website has excerpts from the submission. He also used his Twitter handle to post his defence arguments.

“We are prepared to fight these frivolous charges to the US Supreme Court,” According to his legal team on Ballina’s website. He denies investing $1.2 million in SPRK and claims he only invested $106,915.50, and he, like other investors in the scheme, was a victim of fraud.